Gift Tax and College Loans

You do not say why you are not claiming your 19 year old as a dependent.   Is the other parent claiming her?

No, the tuition you are paying is not deductible if you are not claiming her as a dependent.   You cannot get an education credit if you are not claiming her as your dependent.

No you do not claim the tuition as a gift.   A gift would not be deductible  for you nor would it be taxable for her.

If you co-signed the student loan and you made the payments you can deduct the interest you paid on the student loan.

Rent and food are living expenses.   Living expenses are not deductible, nor are they qualified education expenses, so, no, you cannot deduct anything for paying for rent or food.  Books are education expenses but you cannot claim anything for them since she is not your dependent.

Q. My tuition payments can be considered a Gift, for Gift Tax purposes, correct?

A.  No. Tuition payments made directly to a college, are not subject to gift tax, even if the student is not your dependent.  Reference: https://www.savingforcollege.com/article/tuition-gift-tax-exclusion#:~:text=Tuition%20payments%20made%20directly%20to%20a%20college%20are%20not%20considered,amount%20from%20their%20taxable%20estate.&text=The%20tuition%20gift%20tax%20exclusion%20only%20applies%20to%20tuition%20payments.

Q. On her tuition loan, I am a co-signer. Can this be written off as a deduction even though my name isn't first on the Contract?

A. No. Loans, themselves, cannot be "written off", regardless of who's name it's in.  What the money is spent on may qualify for an education credit or deduction.  You may deduct any interest paid (since you are co-signer, regardless of order on the documents), but only if the student was/is your dependent at the time the money was spent on education. 

Q. Can paying her rent/books/food also fall under a deduction of some sort because she is attending school out of state?

A. Only if she is your dependent.

As the other reply also indicated, the better question is: is she still your dependent?  The answer is: yes, most likely.  You co-signing the loan means that the loan is considered support from you and not self support by the student.  You "paying her rent/books/food" is also support by you and not self support by the student. Almost all unmarried 19 year olds, even going to school out of state, are dependents of their parent(s).

There are two types of dependents, "Qualifying Children"(QC) and standard ("Qualifying Relative" in IRS parlance even though they don't have to actually be related). There is no income limit for a QC but there is an age limit, student status, a relationship test and residence test.

A child of a taxpayer can still be a “Qualifying Child” (QC) dependent, regardless of his/her income, if:

1. He/she is under age 19, or under 24 if a full time student for at least 5 months of the year, or is totally & permanently disabled
2. He did not provide more than 1/2 his own support. Scholarships are excluded from the support calculation
3. He lived with the parent (including temporary absences such as away at school even living off campus), for more than half the year

So, it doesn't matter how much he earned. What matters is how much he spent on support. Money he put into savings does not count as support he spent on him self.

The support value of the home, provided by the parent, is the fair market rental value of the home plus utilities & other expenses divided by the number of occupants.

The IRS has a worksheet that can be used to help with the support calculation. See: http://apps.irs.gov/app/vita/content/globalmedia/teacher/worksheet_for_determining_support_4012.pdf

Furthermore, there is a rule that says IF somebody else CAN claim him as a dependent, he is not allowed to claim himself. If he has sufficient income (usually more than $12,400), he can & should still file taxes. In TurboTax, he indicates that somebody else can claim him as a dependent, at the personal information section.  TT will check that box on form 1040.

Even if he had less, he is allowed to file if he needs to get back income tax withholding. He cannot get back social security or Medicare tax withholding.