Accepted Answer

Special gift tax rules exempt payments for qualified medical and education expenses from gift tax.
To qualify for the exception for education expenses, payment must be made directly to a qualified educational institution and must be for tuition only. The education expense exception does not apply to payments made for room and board or for other ancillary costs of education (e.g., books, supplies, or other similar expenses).

For medical expense exception too the amounts must be paid directly to a person or organization providing medical services. This includes costs for diagnosis, treatment or prevention of diseases, as well as medical insurance premiums. Dental payment are part of the medical expense and will be covered.

Let me know if you have any question.

Please note: This advice is provided with the understanding that all the relevant facts have been provided by you. Any change in facts might affect the advice given and hence may not be relied on in such cases. Nothing contained in this reply was intended or written to be used, can be used by any taxpayer, or may be relied upon or used by any taxpayer for the purposes of avoiding penalties that may be imposed on the taxpayer under the Internal Revenue Code of 1986, as amended.

Expert:	RD
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Answered:	10/27/2009

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