Gifting Money

Aditya G asked:


Hello
My parents have offered to pay for my last 2 years of colleges and are planning to send me $2,000 a month living expenses. I know you can receive only $10,000 as gift money in a year but how do other foreign students manage because their parents are overseas and send them money for living expenses and college fees?

Does it matter to the IRS if my parents send me the money in a lump sum (40,000 at one time) or (2,000 a month)

jgberumen

3 Responses to “Declaring Gift taxes for parents sending money?”

1. v b Says:
   October 21st, 2008 at 2:02 am

   Since your parents are neither US Citizens nor US Residents, they are not subject to US gift tax rules.

   As far as reporting the gift, your obligation starts when the amount received is more than $100,000 in one year. Form 3520, but no tax is due.

2. StephenWeinstein Says:
   October 21st, 2008 at 4:47 pm

   1. There is no limit to what you can receive. The limit is on what can be received without the giver owing gift tax. However, if your parents are not U.S. citizens or U.S. residents, gift tax may not apply to them anyway.

   2. Payment of college tuition and living expenses by the parents of a student is “support”, like paying for a small child’s food and medical care, not a “gift”. Have your parents send the tuition money and fees directly to the college themselves. Have them send you only the living expense money.

3. Judy Says:
   October 22nd, 2008 at 1:07 am

   The limit is $12K not $10k.

   Each parent could give you $12k a year, so doesn’t sount like a problem. And if the send the check for your college fees right to the college, then that doesn’t count against the $12K, only the money they send you for your expenses would count.

   It’s the total for a calendar year, so doesn’t matter if they send a lump some or a little at a time.

   If they aren’t US citizens or residents, they don’t have to file a gift tax return anyway.