This is a great question,
Technically, gifts, including cash and value of services are considered taxable gifts for gift tax purposes. If the parents were to give the child and future spouse 100K to put towards expenses, then this would be a taxable gift. Gift tax return must be filed when one individual gifts more than 12K to another individual within one tax year (gift return rules will follow).
However, if one considers the impact of cultural traditions, it is commonplace for the parents to be responsible for "throwing" or providing the wedding. Therefore if the parents pay for the services of the wedding directly instead of gifting money for the wedding, this would not constitute a gift for tax purposes, since the parents are the purchasers of the services.
Gift Tax Rules:
An individual can give a gift of up to $12,000 in one year (2007) to another individual before any gift tax implications kick in. If you give above $12,000 to any one individual, you must file a gift tax return. The $12,000 is your gift tax exclusion. There is a separate 12,000 exclusion to each person that you make a gift to. Any amount over this is applied to your lifetime limitation of 1 million dollars.
Up to 1 million dollars, there is no gift tax due, because of something called the Unified Credit. After the 1 million dollar lifetime exclusion gets used up, gift tax percentage ranges from 18-45%.
Keep in mind that certain gifts are not subject to gift tax, such as to political organizations, between US resident spouses, and gifts that are made for directly to a school or medical facility or professional for tuition or medical expenses paid on behalf of another.
Also to note, any unified credit used for gift tax purposes will reduce the amount of credit that can be used for estate tax purposes.
I'm sorry I wasn't online when you returned.
I am not sure what you mean by a parent's support obligations----Are you using that as a tax term or a legal term? If the child (at any age) is a dependent of the parents, it could be argued that money spent on the child's wedding is part of his or her support. However, the fact still stands that if the parent gives the child money in the amount of 100k, a gift tax return would need to be filed, whether or not the child is a dependent.
I understand your question, and the gift tax does have grey areas of interpretation which causes people to question common sense and purpose of the tax.... For example, there have been controversies in the past whether or not a fan who catches a famous home run ball at a stadium should pay gift tax if he or she gives it away.
You could also argue that each time you invite someone over for dinner at your home and feed them (including your children), the cost of the dinner constitutes a taxable gift--- or if you give your child a ride to the airport to catch a plane, the value of the car ride is a taxable gift.
Since the gift tax terminology does use the term "indirect" regarding transfer of property, including tangible and intangible, and you are saying that the cost of the wedding is meant to be a gift to the child (as opposed to the parents themselves being hosts of the event), then this interpretation may cause the need to consider gift tax implications.
Although one expert has already agreed with my responses, I will search out additional professional opinions for you on this matter.