student loans

[NN15]

If I pay off my child's student loan in full, do I have to file any tax form in any of the below scenarios:

-the child pays back little by little over the lifetime

-I didnt want the child to pay back

[xmasbaby0]

If you co-signed the student loan when your child was your dependent you can deduct the interest you paid for the student loan on your own tax return.   Beyond that, there is nothing for you to enter on a tax return about the loan.

[DawnC]

No.  You may receive Form 1098-E if you pay student loan interest, but that is an informational only document and does not need to be filed with your tax return.  

[NN15]

I am not asking about student loan interest. I need to know if I paid off my childs student loan fully, do I have to file a tax form (I was told) so it counts towards the lifetime gift limit to the child.

[xmasbaby0]

If your name was on that loan as a co-signer, paying it off was not a gift.   You just paid off a loan that you were already legally obligated to pay if your child defaulted.  

[NN15]

No, i was not a cosigner. 

[RogerD1]

However, if you do pay off the child's loan using your funds it can be considered a gift.  You can give up to $19,000 to anyone without any consequence, however, if you give more than that amount to anyone you will need to file a Form 709 Gift Tax Return.  If you are married, both you and your spouse could give up to $19,000 each to help paying off the loan without needing to file the Form 709.  If you do need to file the Form 709, there won't be any tax consequence, but the amounts you donate will be counted against the lifetime exemption limit of $15,000,000.

[NN15]

That makes sense, thx. Will turbotax lead me to fill this form while I am doing my return and where does it do that?

[xmasbaby0]

Gifts given to family members, friends or other individuals are not deductible.   Gifts received are not taxable to the person who received the gift, and are not entered on a tax return.

If your gift exceeds the yearly limit ($19,000 per individual)  imposed by the gift tax rules, then you will need to complete a Form 709 gift tax form and send it to the IRS, although it is very unlikely that you will owe any tax.

TurboTax does not support Form 709.  It is not an income tax form and would not be included as part of an income tax return.

Here is a link to the form:

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

https://turbotax.intuit.com/tax-tips/estates/the-gift-tax-made-simple/L5tGWVC8N

Here's a link for Form 709 preparation software:

 https://www.puritas-springs.com/product-category/federal

Here are some useful videos on the Form:

https://www.youtube.com/watch?v=a5wJow5h-No

https://www.youtube.com/watch?v=5Z_28sVOrTY

[NN15]

Thank you.