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Level 3
posted Jun 26, 2019 12:02:08 AM

Contribute in lump sum

Hi, If I need to contribute to my kid a lump sum payment ($50k) to help out with college expenses (4 years), is there any tax implication for me or him? Thanks

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2 Replies
Alumni
Jun 26, 2019 8:28:30 PM

No tax to pay (until you reach a ~$4M lifetime limit), but tax papers (Form 709) should be filed in most cases, by the giver, for amounts over $15,000 per year to any person . "In general. If you are a citizen or resident of the United States, you must file a gift tax return (whether or not any tax is ultimately due) in the following situations.

Level 15
Jun 27, 2019 6:05:56 AM

If you pay your child's tuition, and you pay it directly to the school, there is no need for any gift tax reporting.  The school must be a qualifying educational institution.

This exclusion applies to tuition only.  Gifts for any other purpose, such as room and board, must be reported if the amount exceeds $15000.

Also, the lifetime gift tax exclusion is now $11.4 million.  That means you don't actually have to pay a gift tax until your lifetime gifts exceed that total.  But you have to report gifts to an individual that exceed $15000.

Finally, gifts to an individual are not deductible by you, nor are they taxable to the recipient.