<p>I am not sure, but I think think that the gift value IS $13k. Maybe this person , who is kind of well off , and has other kids/stepkids/relatives he seems to look after knows about this number?</p>
<p>Again not knowing specifics, my suggestion is that there have been a lot of ideas suggested on this thread, the student may want to ask the School how a direct payment to the school will affect next year. Then, consult with the donor’s financial adviser or accountant and structure the payment in a way is most beneficial to student and donor based on the various suggestions: loan (to either the parents or the student which may be forgiven later), gift (to either the parents or the student), contribution to a 529 plan, direct payment to the school, etc. $13000 is a lot of money and if I were the donor, I would want it done right. They accountant may have his/her own suggestions. In short there are ways that this can be done, the question is what is the best in the circumstances.</p>
<p>$13K is the amount allowed per person per year to give. So, uncle and aunt could give $26K.</p>
<p>“$13K is the amount allowed per person per year to give.”</p>
<p>Do you mean</p>
<p>$13K is the amount allowed per person per year to give to a student directly for college , to a parent for a student’s college tuition, or given directly to a college (for the student)?</p>
<p>Yes, we’ll probably speak with the FA dept of the school. But the school seems rather stingy already (despite a 55 pct redution in household income from one yr to the next, there was no other aid than what the feds, and not the school, gives; just loans) and it would not surprise me that they would make an amendment to the FA package this yr or next that wd be good for them but bad for the student and the student’s familiy. Thus the outside fact finding and info gathering before bringing this up to the college.</p>
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$13K is the amount one person can gift another without any tax implications. If it is a couple, they can give $26K ($13K each). If has nothing to do with FA.</p>
<p>Curiousparent, I wouldn’t make this the school’s business. The question about how payments toward a student’s bill from a third party are treated wrt FA could be asked as a general inquiry without even saying who you are or who you’re asking for.</p>
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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>
<p>[ol]
[<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.
[/ol]</p>
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<p>Yes even if the name is mentioned, it could be in general terms such as “a relative may be willing to help out but giving a small gift, we are wondering what will happen if we were to receive the gift?”</p>