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I have someone who wants to go strictly by the book. As you know the annual exclusion on gifts is now $13,000. You are not limited to this amount if you pay for health care costs directly to the health care provider or if you pay tuition costs directly to the educational institution.
In the spirit of the law, because medical insurance is a bona fide medical deduction, it would seem only fair that health insurance payments to an insurance company made by a mother for the benefit of her son, should not be limited to the $13,000 annual exclusion. Does anybody know the definitive answer for this?
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| A 'qualified transfer' is not considered a gift for gift tax purposes. The definaition of a 'qualified transfer' includes amounts paid on behalf of an individual to any person who provides 'medical care'. 'Medical care' is defined in IRC Sec. 213(d) and includes amounts paid for insurance, as specifically setforth in IRC Sec. 213(d)(1)(D).
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