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Author: TMFTaxes Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 123143  
Subject: Re: Real estate purchased before the wedding Date: 1/31/2000 4:51 PM
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<<A gift tax question: A friend and his then-fiancee bought a house (in California) in the spring of 1998. My friend supplied the entire $30,000 down payment, and they took title as joint tenants. The wedding went forward as planned about seven weeks later. Should my friend have reported half of the down payment as a gift to the woman who is now his wife?>>

I believe so, yes. If your friend would have simply taken the house as his separate property originally and then "gifted" half of it to his new spouse AFTER the wedding, there would be no gift tax consequences (since gifts between spouses are unlimited and ignored for gift tax purposes).

But the gift is determined on the date of the gift. It's immaterial that the gift and the marriage took place in the same calendar year.

So...yes...I think that your friend has a bit of a the tune of a $15k gift that was made. $10k will be within the limitations, but $5k would be "taxable".

That's my view anyway...based upon what I'm reading.

TMF Taxes
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