August 25, 2014
Authored by: Abigail Weisbrod and Jeanne Mattingly Miller
Originally posted on December 2, 2011 here.
You are allowed to give the gift of tuition to your children and grandchildren. More specifically, you can pay tuition to an educational institution on behalf of a loved one without triggering any gift tax or generation skipping transfer tax.
With the costs of education skyrocketing, more and more tuition bills are ringing in upwards of $20,000 or even $30,000 per year. Making gifts of that magnitude during life through tuition can save thousands down the road. At the end of a four year college education, the student graduates with a college degree, with less student debt, or perhaps even debt free, and you have gifted as much as $120,000 for the benefit of that student without paying any gift tax or