Gift from spouse towards mortgage down payment

[sngj]

I am receiving gift of $140,000 from my wife for down payment on my mortgage. We are taking mortgage with only me as a borrower to get better interest rate. Does my wife need to file gift tax return? 

I have read many docs online saying spouse gifts doesn't need to be declared. Although we both are on work visa in the US but we are residents for tax purposes, so not sure same gift tax rules apply. Please help!

[JohnB5677]

The gift rules do apply.  This is not a gift it is a transfer of funds between spouses.  There is no limitation on this type of transfer.

[sngj]

Thank you! Bank asked to provide a gift letter so that's why we were confused.

Just to confirm, even if we provided a gift letter, fund transfers between spouses are not considered as gift and my wife doesn't need to declare anything, is that correct? 

[DaveF1006]

Yes, unless the gift is incidental to a divorce, it  is not subject to gift tax if the gift is between spouses. 

@nsoshi2