But a gift in 2016 allows her to have a bigger bank account balance at the start of 2017 so that anything drawn on it is “paying her own support”.
I just read somewhere else, that taxable scholarships are excluded from support. This is really bad.
Also, from Pub 970, Tax Benefits for Education, AOTC can’t be used for grad school if a tax-free scholarship covered the tuition. More bad.
LOL! It might be the case that having her borrow money while she’s 22 and 23 and paying interest on it would come out cheaper than having her graduate stipends taxed at our rates. Because she will be a graduate student at the start of the 2017-2018 year, she will be independent from FAFSA’s point of view. Loans do count as student support. She can just save the fellowship money and pay off the loan when she’s 24.