How should I use :Loans + parent contribution ?

[CaliforniaAppli]

---

Members do not see this ad.

I am taking about 35k in loans, and am fortunate enough to get my parents to pay the rest.
My question is does it matter if I take that 35k and put it all into tuition? Or should I use my parent's money on tuition, and the loans on living?

I remember reading something about taxes on the forums before but can't seem to find it.

 

[redpanda]

I am taking about 35k in loans, and am fortunate enough to get my parents to pay the rest.
My question is does it matter if I take that 35k and put it all into tuition? Or should I use my parent's money on tuition, and the loans on living?

I remember reading something about taxes on the forums before but can't seem to find it.

With respect to taxes, each parent can give you something around $8000 (definitely check this figure in the 2012 code because I'm ballparking it) per year as a tax-free gift under IRS rules. However, if this money never hits your bank account (i.e. they write a check directly for tuition), I suspect it cannot be considered a gift (because no one has ever paid taxes on the tuition their parents paid for undergrad) and therefore not taxable. Again, check this.