@Ognak1 wrote:
I believe you.
Am I misunderstanding the following Article?
Whose Tuition Can You Pay to Qualify for Educational Exclusion?
You can qualify for the federal gift tax educational exclusion simply by paying for any student’s tuition. You may cover any student’s tuition, whether he or she is studying full-time or part-time. He or she can also attend a variety of educational institutions, from elementary schools to universities. You might pay for the tuition of your child, your grandchild, a sibling, a student you’re mentoring, or someone else whose education you care about. The choice is yours!
Gifting tuition is a great way to ease the financial burden of someone you love while reducing your annual tax burden. Exclusion gift limits may increase over time, so make sure you’re aware of your eligible claims each year. Don’t overlook opportunities to further a loved one’s education through the gift tax education exclusion.
No. The article is correct (although very misleading since it does not apply until you have given $11.4 million in gifts), but you are confusing "gift tax" with the income tax deduction - apples and oranges - totally different things.
I don't know what "article" you are referring to, but "gift tax exclusion" has nothing to do with income tax deductions. Gift tax is reported on form 709 if it exceeds $15,000 in a tax year to any one person and is not an actual tax until you exceed the $11.4 million lifetime limit but must be reported on form 709 if more than $15K.
Gifts given for tuition are not subject to that gift tax.
**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**
