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Education
Q. I was actually mainly looking for the source of the following statement in the post above:
“You CAN count mortgage interest (but not principle payments), as well as insurance, real estate tax, utilities and HOA fees.”
A. Pub 970 ( https://www.irs.gov/pub/irs-pdf/p970.pdf ) is the reference for this topic. But, you're not going to find that question specifically covered. What you have here, is just my opinion. That money (mortgage interest, insurance, real estate tax, utilities and HOA fees) was spent on housing ("room") for the student while attending college. So, I think that makes them qualified education expenses for a 529 distribution.
The bottom line, for most parents with kids in off campus housing, is that your tax free 529 distribution is limited to the cost of attendance or what on campus students pay, whichever is less. The IRS is most likely going to accept that number.
Q. It it not covered in the article PaulaM linked here?
A. I agree. That said, here is a published opinion that disagrees with me. But, it too, is just an opinion; not an IRS publication or US code.
https://www.savingforcollege.com/article/can-i-pay-my-mortgage-with-529-plan-money#:~:text=A%20mortg.... Note the suggested workaround to have the student pay rent.
Another thing to consider: For tax purposes, the condominium is a 2nd home (unless you are charging rent). As such, the mortgage interest is deductible, as an itemized deduction, on Schedule A. But you cannot "double dip". That is, you cannot deduct, on Sch A, the same interest that you used to claim an educational expense ("room") for the 529 distribution. But, you can split the interest between the two tax attributes, deducting some on Sch A and using some for the 529 distribution.