Ref: 1: Assuming US law, the annual gift tax exemption is $14K (per [giver, recipient] pair, so a couple may gift $28K to a single recipient, or $56K to another couple), there's a process to combine 5 years' worth at once, and amounts over the annual exemption limit count against a lifetime exemption and then are taxable to the donor.
I can't fund any ordinary circumstance under which a gift would be taxable to the recipient.
Thanks for the updated info, this was traditionally conformed to the $10K level with money laundering. The student would not be 'in business' so it would be taxable at the level of the parent only (no business entity), and not be booking the gift as income presumably (no employment or services renedered). I'm not sure if the married parents are each able to gift out of the estate or not, again this may have been revised.
I can't fund any ordinary circumstance under which a gift would be taxable to the recipient.
http://www.irs.gov/Businesses/Small-Businesses-%26-Self-Empl...