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Question

What is the proper way to gift money to a college student for housing, other expenses,
in order to get a tax write off?
By cash or check deposits to her checking account? Or cash/checks made out to her?

Submitted: 62 days and 13 hours ago.
Category: Tax
Value: $15
Status: CLOSED
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Optional Information

Country/State/Province of question: Minnesota

Already Tried:
have not contact anyone at this point. want to use your website for questions.

Posted by Mark D 62 days and 13 hours ago.

Answer

XXXXXXXXXX,

A gift is never deductible for tax purposes, although they can be subject to gift tax if the amount exceeds $13K per a year, per an individual. If you have a dependent that you pay college tuition for, you may claim a tax benefit for those amounts. Please let me know if you have further questions.

Regards,

XXXX X

62 days and 13 hours ago.

Reply

She is not my dependent, however, because she cannot find a job to pay her expenses, I have jumped in to pay her monthly expenses, but not tuition. Tuition is paid by financial aid. Should I pay the rent, and other items directly and save the receipts, or, put the money in her checking account and keep track of the deposits. This is going to amount to $1500 this year and about $3000 next year.

I am retired and on SS and Pensions so I would think I can take some deductions.

Posted by Mark D 62 days and 13 hours ago.

Answer

XXXXXXXXXX,

Unfortunately there would be no deduction for you. The best way is for you to gift the money and she can claim a credit on her return for the expenses paid if she does find a job.

Regards,

XXXX X

62 days and 13 hours ago.

Reply

so, if i understand correctly. if she gets a job, then any expenses SHE can pay for she can claim as college expenses on her tax return.

but until then, any gifts/funds she receives from me or anyone else to pay her monthly living expenses, are NOT deductible on her tax return.

how about one of those college savings plans or is it too late to set up one of those?

thx!

Accepted Answer

XXXXXXXXXX,

It would be too late for a 529b plan and it also really would not make sense due to the lack of time for the investment to grow (no up front deduction). She would also need some income in order to use the credit to offset taxes as an education credit does not produce a refund when no taxes are paid in.

Regards,

XXXX X

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Expert: Mark D
Pos. Feedback: 99.6 %
Accepts: 
Answered: 9/21/2009

Tax Preparer

MBA, CTEC Registered, CPA Firm Experience with Business and Individual Tax Returns and Issues

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