[ridesthemiles]

I know that one can gift up to $12,000 to anyone without the recipient paying taxes.

I don’t think that such a gift exempts the giver from paying taxes on the income in the first place.

I would like clarification, please.

[PeterPrinciple]

I don’t think that such a gift exempts the giver from paying taxes on the income in the first place.

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In general that is true. If you give cash, it is after tax income. But you can give $12,000 of stock and the basis/purchase price and tax liability would go to the person receiving the gift.

[savedbygrace]

I think the deduction is because they are putting the $24,000 into a college fund, not giving the money directly to the girls.

But I might be wrong.