The IRS will not care what you did with the money as long as you properly report the property sale and pay any tax due if this was investment property and there was a capital gain. If a private residence sale then there are different reporting requirements, but reporting the sale of a property that is in your name only has nothing to do with what you can do with the money afterwards. If you file a joint return, which is almost always the best way for married persons to file, the property sale would be on that joint return anyway.
I have never heard of the IRS questioning where the money went unless you are the subject of a total audit or suspected of other wrongdoing, then simply saying that is was a spousal gift should be sufficient. If the money was deposited into a joint account where either spouse can access it then it is joint money and not really a gift. If the money was transferred from your own separate account to her separate account than you would have a record of that transfer to prove that is was a spousal gift should the need ever arise.
**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**
