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Suppose the Child in College pays 55% of her Support with her own funds. Then Child cannot be claimed as a dependent on Parents' return.

So would the 45% of the her Support paid by Parents, less direct payment there-within to school (for tuition) and medical service providers (for medical expenses including insurance premium), now be counted as "gifts"?

To be more concrete, suppose Parents buy Child a sweater, would this be a gift now?

Edit: Further clarification:

This is for the normal situation where parents and child are all US tax residents living in US.

Also I know that IRS probably does not CARE. But I want to know the exact legal answer. Also, I am not asking about the annual exemption or lift-time exemption. I just want a precise black and white answer --- is this a gift or not. (If on the other hand, Child paid less than 50% of her support and thus CAN BE CLAIMED AS A DEPENDENT, then buying her a sweater would be paying for her Support. Even if such sweaters add up to more than $30K, there is no relevance to gift/estate taxes.)

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Yes, excluding tuition paid directly and medical/premiums paid directly, this support would be considered gift support:

You can pay as much as you want for tuition, medical expenses, or health insurance premiums on behalf of your children without worrying about gift tax returns.

Just make sure you pay the school, hospital, or other organization directly.

If it matters to you, 529 plan contributions can transform more of the educational support into non-gift support.

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  • Thanks. That's what I found out as well. Even thought IRS won't care about parents buying sweaters for kids, the problem is that: the implicit existence of sweaters (i.e. 45% support paid by parents) prevents parents from making a full $30K cash/securities transfer to child's investment account, without filing F709 and using the life-time exemption amount. --- Hence my question. Aug 25 at 4:44
  • Also, look into superfunding a 529 plan: savingforcollege.com/article/6-year-gift-tax-averaging Aug 25 at 17:04
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The "IRS doesn't care" gift giving limit is $15000 per giver per year.

Thus, if you and the other parent are giving an amount close to $30000, then technically the gift might push you all over the $30000, but honestly the IRS won't care unless it's an EXPENSIVE high-fashion sweater.


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  • Thank you. I know that IRS probably does not CARE. But I want to know the exact legal answer. Also, I am not asking about the annual exemption or lift-time exemption. I just want a precise black and white answer --- is this a gift or not. (If on the other hand, Child paid less than 50% of her support and thus CAN BE CLAIMED AS A DEPENDENT, then buying her a sweater would be paying for her Support. Even if such sweaters add up to more than $30K, there is no relevance to gift/estate taxes.) Aug 23 at 19:12
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    @ShangZhang if you want "the exact legal answer", then ask a tax accountant, not random strangers on the internet.
    – RonJohn
    Aug 23 at 20:08

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