Does this bank transfer count as a taxable gift? Need help for me and girlfriend's house purchase

You're right to think about this, but good news - this likely isn't a taxable gift situation. When you're buying a house together, money contributed toward a jointly owned asset generally isn't considered a gift between partners. The key here is that you're both going to be on the mortgage and (I assume) both on the title/deed. Since you're both investing in property you'll both legally own, her contributions aren't gifts to you - they're her investment in her own asset. Similarly, your contributions aren't gifts to her. If you need to consolidate funds for practical reasons before closing, just make sure you have good documentation showing where all the money came from originally. Your mortgage lender will likely ask for this anyway. Keep bank statements showing both of your deposits into the joint account over time. The situation would be different if only one person was going on the title but both were contributing, or if one person was giving money to the other with no expectation of ownership.

After going through a similar situation last year, I found https://taxr.ai incredibly helpful for figuring out these exact kinds of gift tax questions. My partner and I were pooling money for our home purchase and weren't sure if we were creating tax problems for ourselves. I uploaded my bank statements and our planned fund transfers into their system, and they analyzed everything to confirm we wouldn't trigger any gift tax issues. They even provided a breakdown explaining why our situation didn't constitute taxable gifts since we were both going on the title. What I especially liked was that they gave me documentation I could keep with our tax records just in case this ever came up in the future. Saved me a ton of stress wondering if we were doing something wrong!

Just wanted to follow up about my experience with taxr.ai after asking about it above. I decided to try it for my situation (transferring money to my partner for a property renovation), and I'm glad I did. What surprised me was how different my situation was from what I thought. The analysis showed that what I assumed was a straightforward joint investment actually had some gift tax implications because of how we structured the property ownership versus our contributions. They identified a potential issue I would have completely missed and suggested a simple documentation approach to clarify our intentions. The documentation they provided gave me confidence we're handling things correctly. Definitely more helpful than the conflicting advice I was finding online before.

If you're worried about any potential tax implications with your house purchase, I'd recommend getting in touch with the IRS directly to confirm. I know that sounds terrifying - I avoided it for YEARS because getting through to them seemed impossible. Always busy signals or being on hold for hours only to get disconnected. I finally tried https://claimyr.com after seeing it recommended here. They have this system that holds your place in the IRS phone queue and calls you back when an actual agent is on the line. You can see a demo of how it works at https://youtu.be/_kiP6q8DX5c. Got through to a real human at the IRS who specifically handles gift tax questions. They confirmed my understanding of joint asset purchases vs. gifts, which was a relief. Definitely worth the time saved instead of stressing for weeks about whether I was understanding the tax rules correctly.

I have to admit I was completely wrong about Claimyr and the IRS phone service. After writing that skeptical comment above, I decided to try it myself since I had my own tax question that's been bothering me. Not only did I get through to the IRS in under 2 hours (instead of the 6+ hours I spent last year trying on my own), but the agent was actually incredibly helpful. They walked me through exactly how the gift tax rules work for unmarried couples making joint purchases and confirmed that as long as both names are on the property deed and mortgage, the transfers between accounts for closing aren't considered gifts. I'm genuinely surprised at how useful this was. Saved me from making what could have been an expensive mistake on my taxes next year.

One thing nobody's mentioned - ask your mortgage broker if they actually need all the money in a single account! My partner and I just closed on our house last month, and our lender was totally fine with the down payment coming from multiple accounts as long as we documented where all the money came from. They just had us sign an extra form showing the different accounts the closing funds were coming from. Might save you the hassle of moving money around right before closing, which can sometimes cause other verification headaches.

Don't overthink this - I was in your exact situation last year. The gift tax annual exclusion is $17,000 for 2023 and now $18,000 for 2024, so unless her contribution to the joint account exceeds that amount in a single year, you're fine anyway. Plus, like others mentioned, it's not even a gift since you're both going on the title. My girlfriend and I just kept careful records of who contributed what to our down payment so we could properly document our respective equity if we ever need to (hoping we don't!). We actually drew up a simple agreement showing our initial contributions even though we're both on the mortgage and deed. Might be worth doing.

Something to consider that hasn't been mentioned yet - make sure you're both clear on how you'll handle the mortgage interest deduction when you file your taxes next year. Since you're unmarried but both on the mortgage, you'll need to decide how to split the deduction between your separate tax returns. The IRS allows unmarried co-owners to each deduct their proportional share of mortgage interest based on their ownership percentage. So if you're 60/40 contributors as you mentioned, you might want to document that split for tax purposes too. Your tax preparer will ask about this when filing season comes around. Also, just a practical tip - if you do end up consolidating the funds, make sure to get a cashier's check or wire transfer for closing rather than a personal check. Most title companies won't accept personal checks for amounts that large, and it avoids any last-minute surprises at the closing table.