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Wondering what tax implications we might incur if my wife's…

Wondering what tax implications...

Wondering what tax implications we might incur if my wife's parents pay off her student loans in lump sum payments

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Loans are in repayment for more than 14 years already. Balance is in excess of $50K

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Answered in 5 minutes by:
3/13/2018
Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 32,739
Experience: Taxes, Immigration, Labor Relations
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NO any tax implications for you or for your wife.

That will be classified as a gift - and gifts are specifically excluded from taxable income

See here

https://www.law.cornell.edu/uscode/text/26/102

(a) General rule

Gross income does not include the value of property acquired by gift, bequest, devise, or inheritance.

.

For her parents - that will required to file a gift tax return - because the gift is above $15,000 per person per year.

That is a threshold for filing requirements.

However - they will NOT have any gift tax liability - as long as the lifetime limit is reached - which is $5,600,000 for 2018.

Let me know if that helps.

Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 32,739
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Customer reply replied 1 month ago
Okay, thank you.
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