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How do I pay my best friend’s 100k student debt in NYC without telling him that I won the lottery?

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In a world where financial burdens weigh heavily on individuals, a remarkable Reddit post caught the attention of thousands. User ambitiouslearner123 shared a heartfelt question that stirred the online community: “How do I pay my best friend’s 100k student debt in NYC without telling him that I won the lottery?” The post quickly went viral, sparking a flood of suggestions from compassionate strangers eager to help.

Let’s delve into this captivating story of anonymous generosity and the extraordinary bond that transcends wealth. We’d love to hear what you would suggest he does.

The Idea

money in case_.
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Apparently, the unsuspecting and in-debt friend lives in NYC. The generous Redditor lives in MD, near DC and wants to pay the debt “for tax purposes and education only”.

As you can imagine, the Reddit thread exploded with ideas.

Helpful Advice

lawyer talking.
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Let’s start with the positive, helpful advice:

  • Can you have a lawyer do it on your behalf? “Our client, who will remain anonymous, is paying off your student loans,” blah blah blah.
  • There may be tax implications, and $100000 in extra taxable income for the year would incur a very large tax bill. It may be desirable to set up a multi-year payment plan or any number of other methods in order to reduce liability of the friend. Very much depends on state law as well.
  • I’m not sure about New York specifically, but as long as it is paying back tuition (which these loans would fall under) it is likely not subject to a gift tax. That said, the first 16k (as of right now from what I can see) of any gift given in a year is untaxed. Since this is 100k, it would still have to be reported that you did what you did and let them decide if paying off a friend’s student loan is considered paying off tuition (non taxed) or just a gift pay settle debts (taxed as a gift).

More Helpful Advice

legal team.
Photo credit: August de Richelieu.

As with most provocative Reddit threads, the comments kept coming:

  • TT732 is organized: “Step 1: Win Lottery; Step 2: Hire Lawyer(s); Step 3: Submit Winning ticket; Step 4: Hire accountant; Step 5: Profit.
  • Seaguard 5’s idea: “So for one, I would advise against making rash decisions with your money like that. You could quickly lose most of it and regret those decisions for the rest of your life. Be smart about your money and get a good financial advisor that’s paid by the hour (not by percentage of Capitol) and listen to them and pretty much do what they say. You can quit your job if you have one, but live within your means. At least within the first year or so. Just to get the rest of your life secured monetarily so you don’t fall back to where you were beforehand or worse…Good luck, and congratulations”.

Friendly Warnings

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Some Reddit commenters were treading cautiously:

  • If the friendship is real. Don’t lie, please. Be dedicated to keeping it a secret and make the transaction opaque, but don’t lie.
  • If you want to keep your winnings a secret, have some self-discipline and keep it secret. You are literally risking him finding out, and then ruining the friendship. Large amounts of money ruins friendships and you know this. If he tells you “man some stranger paid off my student loans” and you get even a small smirk of pride from helping your friend, he’ll know. He’ll ask questions”.

The Doubters – And One Who Wouldn’t Accept the Money?

refusing money.
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There are always those who find “problems”:

  • I don’t know about you, but it would take me awhile to trust this lawyer calling/emailing/etc telling me to accept a bunch of random money.
  • My thoughts exactly. My spidey sense would be tingling
  • They wouldn’t. They’d call you and ask to meet with them first. You’d still be stunned when they told you, but you’d probably realize it’s not a Nigerian prince when you went to their office. In any case, OP probably does need to discuss anything like this with a lawyer first.
  • Voicemail: “Hello, this is yadda yadda from yadda yadda law office. We have some good news regarding your student loan, please come down to our office.” Yeah, I still wouldn’t respond or go, lol. But I’m dumb, I guess, and wouldn’t receive my friend’s anonymous gift.

What About Taxes?

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No one – and we mean no one – can ignore taxes:

Redditors were all over the place with this one. Are there tax implications? Would they fall to the payer? Or the receiver? There were arguments about whether the debt was “cancelled” or “paid”. Whether the payment would be subject to a “gift tax” or not. 

Let’s just say that part of the thread became very confusing. It is safe to say that a lawyer and CPA would be the best resources. I mean, would you take tax advice from someone called “theres_no_truth”?

Snarky Words

woman in polka dots.
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Reddit is a snarky place. It just is. You gotta love it for what it is:

  • Tonyele94 said: “Hey, it’s me, your friend :)” to which medium added, “Don’t listen to this guy. >:| I’m your friend. :)”. Can’t blame them for trying.
  • Block444Universe is a tad cynical: “It’s frigging ridiculous you can’t pay off someone’s loans without it costing them more money. This world is a big scam.”
  • Better call Saul.
  • You don’t want a criminal lawyer, you want a criminal lawyer.
  • I thought all lawyers were criminals?
  • Dammit!!! I just kept hiring more and more lawyers and now the money’s gone!
  • “A Nigerian price would like to pay off your loan”
  • You should tell him you won, that way you can see if he’s still a friend worth paying for

More Snark

pulling hair out.
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Some people cannot help themselves:

  • Tell them you committed a crime and it’s best if they don’t ask any questions. Now you need to launder the money and you want to do that by paying off their student loan.
  • Hey, it’s me, your friend. I just don’t want to work a bit and $100k would last me 3-4 years. Thanks!
  • Wire it to me and I’ll see he gets it
  • Oh hey buddy, long time no see! Hey, about my mortgage………
  • Give it to me and I’ll pay it in my name so it won’t be traced back to you.
  • mah093 put it this way: “Step 1: Decide that I am your best friend.
    Step 2: Tell me you recently were hired as a consultant in a field of your personal expertise, and would like to help with my student debt using your earnings. Step 3: I weep openly, accept as graciously as I can, and never ask you about the lottery.

Nailed It

thumbs up; 2 hands.
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Calling it like it is:

OddResponsibility565 nailed it: “People on here asking for handouts like read the frigging room; this is why people are paranoid when they win the lottery. Covetous leeches like y’all.”

Snarky – But Smart – Advice

woman in blue shirt.
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Sometimes snark can be alongside smarts:

  • Dude, you won the lottery. Hire a lawyer, don’t ask strangers on reddit. I’ll happily accept payment for this high quality legal advice.

There Are Good People In The World

friends hugging.
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Check out this part of the thread. Serious warm-fuzzy feelings all around. We, too, want to commend the original poster. Hope we get a follow up!

-I have no advice for you, but I want to say that’s a pretty solid move. Good on you.

Original Poster: Thanks he’s been my best friend since day 1

-That has to be an awesome feeling X10 then. Right on. How long after winning did you know you were going to do this for him?

Original Poster: Since forever. He has always been there for me even after I was bullied and ostracized. I feel bad that he has to take on student loans. He’s so smart too.

And as m-j10 said, “Everyone has given you solid advice about getting a lawyer and telling no one. I just want to add that you’re a great friend and I’m glad someone as generous as you won the lottery! I hope your life is now made easier.”

Did they miss anything? What would tell him to do?

This article was inspired by this Reddit thread.