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trgaucher
New Member

In paying down a girlfriend's student loans, does the amount I pay count towards the $14K gift tax exclusion? Alternatively, does this hold true if I am a cosigner?

 
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xmasbaby0
Level 15

In paying down a girlfriend's student loans, does the amount I pay count towards the $14K gift tax exclusion? Alternatively, does this hold true if I am a cosigner?

If you co-signed for your GF's student loan, then you can use the interest from the 1098E on your tax return.  Otherwise, you cannot use it on your tax return.  Only the person who is legally obligated to pay the student loan (including a co-signer) can use the interest.  If you are "gifting" her the money to pay the loan, a gift given to her is not deductible for you.  If you give her more than $14,000 you need to complete a 709 gift tax form.

Turbo Tax does not support the gift tax form 709, but here is a link:

https://www.irs.gov/pub/irs-pdf/f709.pdf

**Disclaimer: Every effort has been made to offer the most correct information possible. The poster disclaims any legal responsibility for the accuracy of the information that is contained in this post.**

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5 Replies
xmasbaby0
Level 15

In paying down a girlfriend's student loans, does the amount I pay count towards the $14K gift tax exclusion? Alternatively, does this hold true if I am a cosigner?

If you co-signed for your GF's student loan, then you can use the interest from the 1098E on your tax return.  Otherwise, you cannot use it on your tax return.  Only the person who is legally obligated to pay the student loan (including a co-signer) can use the interest.  If you are "gifting" her the money to pay the loan, a gift given to her is not deductible for you.  If you give her more than $14,000 you need to complete a 709 gift tax form.

Turbo Tax does not support the gift tax form 709, but here is a link:

https://www.irs.gov/pub/irs-pdf/f709.pdf

**Disclaimer: Every effort has been made to offer the most correct information possible. The poster disclaims any legal responsibility for the accuracy of the information that is contained in this post.**
trgaucher
New Member

In paying down a girlfriend's student loans, does the amount I pay count towards the $14K gift tax exclusion? Alternatively, does this hold true if I am a cosigner?

I am less worried about deductions on my end (I will likely be phased out) than if I will bring down my lifetime gift exemption by paying down her student loans in excess of $14K per year.
xmasbaby0
Level 15

In paying down a girlfriend's student loans, does the amount I pay count towards the $14K gift tax exclusion? Alternatively, does this hold true if I am a cosigner?

Your lifetime gift limit without having to PAY gift taxes is $5.4 million.
**Disclaimer: Every effort has been made to offer the most correct information possible. The poster disclaims any legal responsibility for the accuracy of the information that is contained in this post.**
trgaucher
New Member

In paying down a girlfriend's student loans, does the amount I pay count towards the $14K gift tax exclusion? Alternatively, does this hold true if I am a cosigner?

Understood, but I would like to avoid reducing that total if possible, hence why I am wondering if paying her student loans when not a cosigner on them in excess of $14,000 would count against the lifetime gift limit of $5.49 million.
xmasbaby0
Level 15

In paying down a girlfriend's student loans, does the amount I pay count towards the $14K gift tax exclusion? Alternatively, does this hold true if I am a cosigner?

Yes, if you give her more than $14,000 it counts toward the lifetime limit. If you are not a cosigner--which it seems you are not--then avoid the gift amount by giving her under $14,000.
**Disclaimer: Every effort has been made to offer the most correct information possible. The poster disclaims any legal responsibility for the accuracy of the information that is contained in this post.**
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