Buying house for Child to help with In State Tuition Costs

[Peter Schuyler]

My REI lawyer on BP said this might work, I wanted to get some feedback.

• My daughter will be attending a University in a different state next fall
• We buy a small house for her this year, and put the title in her name in that State
• It rents out year one and she generates in state income and claims this on her taxes (lowest tax bracket)
• Freshman year she lives in dorms as mandated, she switches her drivers license and car insurance to that state year one.
• Sophomore through Senior year, she moves into one bedroom in the house, rents out the others to friends and still collects rental income and pays local state taxes, expenses, etc and has a place to live.
• She seeks in state tuition in year two after owning a house in state, collecting income and filing taxes with the state.
• Her tuition, room and board is being paid by her 529 account in her name, so technically she is "emancipated" from mom and dad.

Has any one tried this to reduce the costs of being an out of state resident during college.  She basically becomes an in state resident by living in state, owning a income property and filling taxes.  The mortgage is in my name (private lender basically)

Pete

[Levi T.]

Originally posted by @Rick Pozos:

When you try to cheat your way out of something, you end up paying for it in the end. Ask me how I know. Plus, what kind of message are you sending to your child?? You are showing her that the rules do not apply to her if you have a good scheme.

If you are an IT professional you should be making plenty of money. Why are you trying to cheat the system?? YOu should have been saving money for 5 or 10 or 15 years to send your children to college just like everybody else. But instead, you want to try to get out of paying out of state tuition. If you live out of state, pay out of state tuition. Play by the rules.

There are plenty of great colleges and universities here in Texas including the two main systems, University of Texas with lots of branches, and the A and M system also with many branches across the state. 

 That's not cheating, that's following the rules and winning. He could very well move the entire family to the state and get the same deal, would that be cheating? No. As Trump said, it makes him smart. Nicely done Peter!

I figured I would pickup an apartment complex or two when my kids get to that point. Can't lose, save some cash and expand my rental footprint.