<prompt> Human: To make a long story short, my wifes parents want to give us 15K to pay off debt my 6K school loan and her 9K car loan. Whats the potential that this might screw us at tax time next year? Any risk? We live in NY state.  <response>: Its within the gift tax exclusion and shouldnt be a problem. Also the donor would be responsible for the taxes anyways. The only think I can think of is that you wont be able to deduct your interest payments anymore. But thats small trade off for becoming debt free. 