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<p>True, it has nothing to do with FA. If the uncle gives more than $13000, he (the uncle) has to pay gift tax to the IRS. As a couple, they can give $26000. This per year, so one could give a gift on Dec 31st and another on Jan 1st in theory, though one would not advice it as IRS can get suspicious with valid reasons.</p>
<p>There are two exceptions to this rule as pointed out in post #7</p>
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[<em>]Any amounts paid directly to the college for tuition and fees. So if the fees was $40,000 and this amount was directly paid to the college, it would not come under this $13000 limit for gift tax.
[</em>] The uncle can contribute $65000 to a 529 Plan (which is to be used for education expenses) as long as they agree not to make another contribution for 5 years. This exemption doubles to $130,000 if the spouse also contributes.
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