Message Font: Serif | Sans-Serif
 
No. of Recommendations: 2
...we will be footing the bills for the degree, room and board, insurance, and car. Probably $50,000 all-in.

That's a fair chunk of change in a short time. This can run afoul of imputed income to your nephew kinds of things.


How? Nothing in OP's scenario produces taxable income to the nephew under any theory I've heard of.

Also, gifting him the money (your wife and you each doing so brings the annual amounts under your collective gift limits) would alleviate this, too.

It would help for OP to pay the tuition directly to the school. That is gift-tax free and doesn't count against the $13,000 annual exclusion. On top of that OP and spouse could gift $26,000 in a calendar year without incurring any gift tax responsibility other than possibly having to file a gift tax return.

Pub 950 has an overview of gift tax.

Phil
Rule Your Retirement Home Fool
Print the post  

Announcements

Disclaimer:
In accordance with IRS Circular 230, you cannot use the contents of any post on The Motley Fool's message boards to avoid tax-related penalties under the Internal Revenue Code or applicable state or local tax law provisions.
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.
Advertisement