Gift tax - tution

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okinawafl
Posts: 96
Joined: Sun Jul 11, 2021 12:38 pm

Gift tax - tution

Post by okinawafl »

I will need to pay tution for my family members who will be coming to U.S. as international students (F1 visa).

He has 5 years exemption from SPT (so he will be filing 1040 NR). May I know if I pay over $16,000 tuition for him, will I subject to gift tax?

thanks.
nelsona
Posts: 18311
Joined: Wed Oct 27, 2004 2:33 pm
Location: Nowhere, man

Re: Gift tax - tution

Post by nelsona »

If the child is your dependant, and lives with you half the year, you can spend any ammount on him without giving rise to gift tax. Otherwise giving him more than the yearly limit makes you subject to gift tax on form 709.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing :D
okinawafl
Posts: 96
Joined: Sun Jul 11, 2021 12:38 pm

Re: Gift tax - tution

Post by okinawafl »

May I clarify if I paid the tuition over $16,000 (say $20,000) 'directly' to the univeristy this year for my relatives (who is a "F-1 student", not U.S. tax resident and will file 1040NR), will the total amount I paid for him will be exempted from gift tax calculation. Or this tuition exempt is not applicable when the donee is non-resident or for all donee regardless their status?


thanks again.
nelsona
Posts: 18311
Joined: Wed Oct 27, 2004 2:33 pm
Location: Nowhere, man

Re: Gift tax - tution

Post by nelsona »

It is whether they are your dependent, regardless of where they live.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing :D
ND
Posts: 291
Joined: Thu Feb 21, 2013 5:28 pm

Re: Gift tax - tution

Post by ND »

Investigate 'The general rule is that any gift is a taxable gift. However, there are many exceptions to this rule. Generally, the following gifts are not taxable gifts. Tuition expenses you pay for someone (the educational exclusion). https://www.irs.gov/businesses/small-bu ... gift-taxes
okinawafl
Posts: 96
Joined: Sun Jul 11, 2021 12:38 pm

Re: Gift tax - tution

Post by okinawafl »

Thanks.
So it looks like even my relatives is not my dependent (and not u.s. tax resident as well) and I pay tuition over $16k directly to the university, I don't have to worry and report any gift to IRS (form 709).
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