(Closed) Advice needed: tax implications of fiance paying off student loans

posted 6 years ago in Legal
Post # 3
Member
14496 posts
Honey Beekeeper
  • Wedding: June 2011

I would ask the accountant directly, but I think that you can structure it with interest and that payment is deffered until marriage then the loan can be forgiven because it is considered it under communal property.  My dad helped a client do this and I can’t remember exactly how it was put, but I think that was the general jist of it. 

Post # 4
Member
3969 posts
Honey bee
  • Wedding: September 2014

I am not a tax professoinal by any means, but I thought gifts could be as large as 12k or something similar before being taxed. Unless he was planning on giving you more than that, I don’t see how it would be a problem?

Post # 5
Member
730 posts
Busy bee
  • Wedding: June 2010

As a fellow law student who got an A in Federal Income Tax… I’m not entirely sure either. Haha! I think @tksjewelry is right though… you’d have him “loan” you the money with interest, repayment deferred until marriage. Once you get married (as long as you don’t have a prenup making things weird), the income he would get from the interest would be community property, so it doesn’t really matter that it exists. I’m not sure whether or not you’d have to write him a check to actually “repay” it, but if you do – you can just have him cash it into a joint account and it’s not a big deal. 

DEFINITELY get a professional accountant to help you with this though. Those IRS guys are picky!! Make sure it’s all totally in writing and enforceable and all that. Also, make sure you use a market interest rate, not just a tiny insignificant interest rate (or else it still operates as a gift).

Post # 8
Member
3969 posts
Honey bee
  • Wedding: September 2014

@lawgradtobee: I figured as much, but I never like to assume! That is really wonderful that your Fiance is 1) willing to help in this regard and 2) has the financial ability to.

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