tax on gift to future spouse?

[gnawbed]

My fiancee is going to buy a house in June.
The mortgage needs to be in her name alone for various reasons.
I hold the assets for the downpayment, and want to gift it to her.
We will be married before the end of this year.

Will the downpayment gift be considered a gift to spouse, even though it was given that year before the wedding? Especially since we will be filing tax forms as married for 2002. (The gift amount will be greater than $11,000)

 

[loku]

WILL THE DOWNPAYMENT GIFT BE CONSIDERED A GIFT TO SPOUSE, EVEN THOUGH IT WAS GIVEN THAT YEAR BEFORE THE WEDDING? ESPECIALLY SINCE WE WILL BE FILING TAX FORMS AS MARRIED FOR 2002. (THE GIFT AMOUNT WILL BE GREATER THAN $11,000)

The downpayment will not be a gift to a spouse because only gifts given to a person who at the time of the gift is the spouse qualify. The pertinent part of the Code follows:

IRC Sec. Sec. 2523. Gift to spouse
(a) Allowance of deduction
Where a donor transfers during the calendar year by gift an interest in property to a donee WHO AT THE TIME OF THE GIFT IS THE DONOR'S SPOUSE, there shall be allowed as a deduction in computing taxable gifts for the calendar year an amount with respect to such interest equal to its value.

However, you can apply the lifetime exclusion ($700,000 for gifts given in 2002) against the amount of the gift.

If you simply loan her the money, then there is no gift.