[[Are there any gift tax implications if a parent choose
to pay off a child's student loans (even if the amount exceeded $20,000 in one year)?]]

There certainly could be. It all depends upon the legal liability for payment.

If you are on the loans, and are legally liable to make the payments (either in full or in part), then you are just fulfilling your responsiblities, and there are no gift tax issues.

On the other hand, if the legal liability for repayment rests completely with your child, and you decide to step in and make the payment, you may have effectively made a gift.

Now, then, depending upon your circumstances, it could be argued that you are simply "supporting" your dependent child, and no gift tax issues would airse. But there is not enough information in your question to go in that direction.

You might want to read my post in the Taxes FAQ area (archives section) regarding the deducting of interest for higher education loans. There may be a tax deduction there somewhere, and I would hate to see you lose it because of poor planning on the payment of these loans.

TMF Taxes
Roy

Want to learn more about taxes and investing? Then we have a deal for you!! The Motley Fool Investment Tax Guide is now available through Fool Mart. Be the first one on your block to own this masterpiece. There is still time available to do that tax planning (and tax saving) before the end of the year. So just click on this link (http://www.foolmart.com/market/product.asp?pfid=MF+013+I) to read more about this amazing collection of tax information. (Apologies for the shameless plug…but it is a pretty good book…if I do say so myself). In addition, if you would like to visit the Taxes FAQ (Frequently Asked Questions) area, click on http://www.fool.com/school/taxes/taxes.htm and you'll be right at the home page. Pay special attention to the "archives" section. Check it out. Finally, if you need to get to the IRS web site, click on http://www.irs.ustreas.gov to go directly there.