Here's the situation: My daughter has $100K of student debt. I'm a cosigner on the loan. I want to eliminate the debt. My daughter has limited income.
Since I'm the cosigner, I believe I could just pay the debt without tripping over any kind of gift tax. However, she'd end up with 100% of the "benefit" (interest accrued tax-write-off) but without the income to really utilize it in any effective way - it seems like a waste.
I'm trying to come up with some creative ways to turn this lemon into lemonade.
For example, loan her the money myself at a reduced rate. I'd have to recognize the interest as income, but it would give her a write-off over the years. I'm just not certain about the ramifications and pitfalls of that strategy.
Create a scholarship grant through my business that she could use to pay off the loan and the business could write off, but now she's potentially got a large amount of income to worry about.
Thoughts?
Submitted October 18, 2020 at 08:39PM by WealthVictory https://ift.tt/3kdm5Jj
