A parent pays all tuition and living expenses for a 25 year old student with no income. The student is the dependent of the parent. Does a gift tax return need to be filed if the expenditures were greater than $14,000 in 2017?
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Are there strings attached to the payment, such as continued progress toward a degree? If so, it wouldn't really be a gift, would it? For example, if student suddenly decided to drop out of school at the beginning of the term, would parent expect re-payment of refunded tuition?
The other factor I see is legal obligation for support -- unlike with a minor, parent is not obligated to pay any support expenses for a 25 year old non-disabled child, but maybe it varies by state."You said it, they'll never know the difference. Come on, we'll paint our way out!" - Moe Howard
"That's enough! When you didn't know what you were talking about, you really had something! [to Curly]" -Moe Howard -
Education Expense
If he paid the tuition directly to the education institution, then no gift tax return is required for the tuition expense
See Code 2503 (e)Comment
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