Maybe I am overthinking it. Bottom line is my wife is gifting money to help buy the house. To do that I loaned her money from my portfolio line of credit I have. She is paying me back over 5 years. We thought that the principal amount used to pay me back would be considered the gift (not the tax distribution portion). She is paying me back from her 401K. By doing it over time, she is able to spread it out. As well we thought we would stay within the exemption limits. In the end, the loan I gave to her was given to her daughter for a down-payment, but she pays me back from her funds over time. Are you saying that because we transacted as a loan between us, no gift has taken place (even though the money was used for the down payment)
