Paying my brother's fees and gift tax

[yashK1]

Hello,

I want to pay my brother's graduate school fees next year. He is my biological brother. We have the same middle name and last name. 

1. Is there any limit of fees I can pay ?

2. Do I have to pay gift tax ?

3. Do I have to report anything to IRS ?

4. If the fees is more than 10K, shall i pay it in one time or in multiple transactions.

I have not paid this big amount to anyone before. If someone can advice whats the best legal way to do this.

Thanks   

[TomD8 · Accepted solution]

1.  There is no limit.

2.  It is extremely unlikely that you would have to pay any gift tax, since the lifetime exclusion is $11.4 million.

3.  If a gift to an individual is more than $15,000 (2019), you must report it to the IRS on Form 709.   HOWEVER, if you are paying his tuition, and you pay it directly to the school, you need not report it.  The school must be a "qualifying educational institution".   If your gift is for tuition and other expenses such as books, etc., you must report the other expenses if they exceed $15,000. https://www.irs.gov/pub/irs-pdf/f709.pdf 

4.  From a tax point of view, it doesn't matter, except for the $15K reporting requirement.

[yashK1]

Thanks. @TomD8 . It means that 15K is the limit to report IRS and not for taxes. I always thought that if i am giving gift of more than 15K, I have to pay gift tax

[TomD8 · Accepted solution]

You don't have to pay gift tax until your total gifts exceed the lifetime exclusion.

The $15000 limit refers only to the annual reporting requirement.  Gifts under that amount don't have to be reported.

Note my edited original reply regarding gifts of tuition.

[yashK1]

Thanks @TomD8 And then this 15K reporting.

1. Is it applied to a single user or can i gift 14K to my brother as well as 14K to my father. In this case, is there any need of reporting. 

2. Also can gift be given only to closer relatives (brother, grandpa, sister, spouse)

3. Do I need to take any documents/form from them after giving them so huge gift.

Sorry for asking so many questions. This will be the first time I am giving gift. So just assuring that I follow all the rules properly  

[TomD8]

The reporting requirement applies to each gift recipient individually.  Thus you could give 14K to each of two people without a requirement to report.  You can give gifts to any individual, not just relatives.  And no, they are not required to furnish you with any documents.

[VolvoGirl · Accepted solution]

The 15,000 is for each person you give to.  Can be to anyone, not just family.   And if you are married.......

you can give someone 15,000

your spouse can also give them 15,0000 for a total 30,000

And if they are married you (and your spouse) can give each of them 15,000 for a total of 60,000!