My son has $50000 in student loans can I pay them off right away or is it only $12000 a year tax free?
My son has $50000 in student loans can I pay them off for him right away at once, or is it only $12000 a year tax free same way as I can only give $12000 a year tax free gift?
You can pay it right away if you want to but then you will have to report it to IRS and also pay taxes.
You are right the limit is 12000, but you and your spouse can do it together and thus help your son with tax free 24000 a year.
If you pay more than 12000 or 24000 (if doing together) the additional amount will be deducted from the real estate exemption taxes.
Above information is best to my knowledge, please refer IRS print journal for gift taxes before taking a final decision.
