Let's say I want to transfer $20,000 as a gift to my fiancée. After a few months (within the same year) she returns the money back to me, with no interest, as we agreed beforehand.

Does this imply that any of the following statements are true?

  1. I have to pay a gift tax when I give these money to her.
  2. She has to pay a gift tax when she returns these money to me.
  3. These money can be considered as her income.
  4. This can be considered interest-free loan.
  • 1
    Was it always intended that she give the money back at some time? – DJClayworth Sep 7 '16 at 17:03
  • @DJClayworth yes, this is some kind of arrangement between two of us – wintermute Sep 7 '16 at 17:09
  • You would not pay gift tax in any case, unless you have previously given her at least $5.43 million and used up your lifetime exclusion. You would have to file a gift tax return, if this were actually a gift. But if it was understood she would repay it, it's not a gift, it's a loan. – Nate Eldredge Sep 7 '16 at 17:18
  • @NateEldredge Thank you for your response. If that is a loan, do I need to prepare any additional paperwork for my or her tax returns? – wintermute Sep 7 '16 at 17:20
  • @wintermute Please edit that information into the question. – DJClayworth Sep 7 '16 at 17:47

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