Joules Posted August 3, 2017 Share Posted August 3, 2017 I need opinions. A grandparent is paying room and board this term. I have the option of writing a check to us, writing a check to ds, or them paying direct on the college website. Tuition is covered by scholarship, so this is all that needs to be paid. We don't qualify for any need-based aid, so I don't think it matters how it is done, but if the grandparent is paying directly, the amount is exempt from gift tax. That may not matter because I don't see lots of other gifts, but if the offer comes up next term or Christmas, it might make a difference. Since it is room and board, I don't think any of the tax credits would apply, so I won't lose by someone else paying What should I be considering here? Quote Link to comment Share on other sites More sharing options...
fourisenough Posted August 3, 2017 Share Posted August 3, 2017 We have a similar scenario. Grandmother paid the college directly. 1 Quote Link to comment Share on other sites More sharing options...
katilac Posted August 4, 2017 Share Posted August 4, 2017 Grandparent should pay college directly. 1 Quote Link to comment Share on other sites More sharing options...
bettyandbob Posted August 4, 2017 Share Posted August 4, 2017 Pay college directly. 1 Quote Link to comment Share on other sites More sharing options...
G5052 Posted August 4, 2017 Share Posted August 4, 2017 It will depend on the college, but my oldest's school allows the student to set up for up to three individuals to have an online account where they can see just the financial part and pay some or all of it. That school takes e-check or a credit card, but they charge 2.5% extra if you use a credit card. Today he finally got into all the classes he needs (not a great schedule, but in), so now when have to figure out the extras for a commuter student like parking and probably a basic meal plan. Then I get to pay the bill! 1 Quote Link to comment Share on other sites More sharing options...
Joules Posted August 4, 2017 Author Share Posted August 4, 2017 Thanks, that is what I was thinking, but I was afraid there was a gotcha that I might miss. Quote Link to comment Share on other sites More sharing options...
plansrme Posted August 4, 2017 Share Posted August 4, 2017 I would do it however it is easiest for the grandparent, you know--to encourage her to do it again! From a gift tax perspective, gifts of $14,000/year do not count against the lifetime gift tax emption, so they are free-from-gift-tax forever. The $14,000 is easy to multiply, however--if the grandparent is married, she and her spouse each can make a $14,000 gift to the same person; they each could also make a $14,000 gift to you and to your husband, as well as to the student, that you each could then use to pay the college. In other words, if the grandparent is married, and so are you, it's easy to get the exemption up to whatever $28,000 x 3 is (okay, $84,000)/year. That should cover room and board at just about anywhere. Quote Link to comment Share on other sites More sharing options...
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