If I Refinance Student Loans with a Cosigner Will It Help Them Avoid Gift Taxes?

[AMedStudent]

As the title suggests, my mom is coming into some money after the passing of a relative. My mom approached my wife and I today about ways she can help us out financially (paying for residency applications/travel for interviews) and other ways she can spend money on us without worrying about that pesky $14K gift limit. I know that payments directly onto my student loans would count as a gift and could be taxed for her if the gifts exceeded the 14K in total.

I was wondering, if we refinanced a certain amount of my student loans that they want to pay off, using my mom as a cosigner, could she in turn pay off the loans and avoid paying a gift tax because the loan is also under her name?

I've done some googling but can't seem to figure out any other good ways to do it. Thoughts?

(I know my mom can give 14 to each of us risking 28K, but if it were going to exceed that amount...)

[jfoxcpacfp]

Gifts > $14k per year are not taxed, just reported. Unless there is a chance your mom will pass away with at least $5.45M in her name (2016, increases annually), there is no consequence to giving more. How this works: Gifts > $14k are reported and tracked. These amounts reduced her lifetime exclusion. So, if she gifted a total of $100k to you and your spouse this year, her lifetime exclusion would be reduced by $72k, bringing it down to $5.378M that could be excluded from estate taxation at her death. As you see, this limit applies to a relatively small segment of the population.

Your refinancing idea would still count as a gift, btw.