<p>I just gave older daughter money for graduate school out of my savings account, it’s a fairly large sum. My younger daughter is applying to college, will this be something that d2’s colleges will look at as a suspicious move of funds?</p>
<p>Colleges won’t know about it unless you tell them. Colleges don’t “look at your accounts” when you apply for financial aid; you simply disclose what your account balances add up to when you complete the forms.</p>
<p>As long as the transfer to your older daughter was a legitimate gift and not an attempt to hide assets, there shouldn’t be any problem.</p>
<p>You will report your assets (including account balances) as of the date of filing your younger child’s FAFSA and Profile (if required). So no one is going to care about previous balances.</p>
<p>thank you. the money to my daughter is earmarked for her grad school, (saved because had scholarships for college) which she is applying to now. someone mentioned colleges can look back at your accounts and ask questions, is this not true?</p>
<p>Colleges can’t ever look at your accounts. They can ask you to provide documentation if something looks suspicious to them. However, I don’t see how this situation would ever trigger a question. You report the balance you have. Why would anyone suspect that two months prior it had been much higher? And if a question were asked, you have an answer and a paper trail. Done.</p>
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<p>This does not matter, if it is in the bank on the day that you file the FAFSA, it must be reported as an asset. </p>
<p>for example: </p>
<p>Your can’t say that I have 20k in the bank, but 10k is earmarked for D1’s grad school, you must report the 20k</p>
<p>When it comes to schools giving out their own institutional monies, they can ask for what ever they want and look back for as many years as they want.</p>
<p>Don’t you show large cash gifts on your taxes?
When they verify your records, that would show up,</p>
<p>Emerald, I believe gifts UNDER a certain amount each year are not reported on your taxes.</p>
<p>sybbie–I thought the OP said she already gave a “large sum” to D1? so no longer in her account at all.</p>
<p>I think the challenge is if OP just “gave” the money to her daughter, it might be considered a gift vs. paying daughter’s grad school tuition/ expenses. If it is a gift that is reported on the taxes the school may ask for taxes from previous years. Hey, the Money has been spent</p>
<p>Emerald, I believe gifts UNDER a certain amount each year are not reported on your taxes.</p>
<p>The gift tax exclusion amount for 2013 is $14,000. A couple can jointly give $28,000 to as many individuals as they wish without the need to report.</p>
<p>I think the challenge is if OP just “gave” the Monet to her daughter…</p>
<p>I bet she wishes she had a Monet to give…</p>
<p>You do not report gifts on your income tax form, there is a separate gift tax reporting form. In reality, most people do not report gifts any longer because the personal estate/gift tax exemption is so high ($5+ million), that tax does not touch many people and there is no penalty for not reporting since no tax is due.</p>