<prompt> Human: Im graduating in May and my grandfather was incredibly generous in helping me get a jump-start in paying off my student loans. He gifted the money to me its under 14k so there was no gift tax, and I applied it immediately to my highest-interest loan.Now, a good chunk of that was interest that had accumulated so far. I know you can deduct student loan interest from your income I worked a summer job, but since I didnt originally pay income tax on this money, can I still do that? Also, is the IRS going to wonder where I got this extra 10k, since this doesnt show up on any of my W-2s?  <response>: Yes, you can deduct any interest you pay regardless of the source of the money you pay it with up to 2500 per year.Also, is the IRS going to wonder where I got this extra 10k, since this doesnt show up on any of my W-2s?No. 