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Slev13 writes (in part):

I would assume that them paying for the tuition will be tax free since they're able to each give up to $11,000 per year to her, is that right? Tuition is only about $9000/year.

I reply:

My understanding is that money paid directly to the school for tuition does not count against the gift tax exclusion. Nevertheless, it seems to make more sense to structure the transaction as a gift to you and your wife (at least in part), so that you can take advantage of any available tax credits for your daughter. --Bob
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