Neither one of you reports it. Paying off a car loan is not deductible. A gift to an individual is not deductible, so if she paid off your car for you, it is not taxable to you nor deductible for her. Generous--yes. But not deductible. If she gave you over $14,000 to pay off the car, she may need to fill out a gift tax form 709. She will not have to pay tax for the gift but any gift over $14,000 is added to the amount you are allowed to gift over your lifetime. (About $5.4 million before it becomes taxable)
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.**
