9111 / What are the potential gift and estate tax consequences when unmarried partners own property jointly?

Two unmarried partners may own property jointly as a joint tenancy with a right of survivorship, meaning generally that each individual is a co-owner of the property and that upon the first partner’s death, the survivor retains his or her right to the property.¹ While this can be a beneficial estate planning strategy for unmarried taxpayers, gift tax liability can arise when one party contributes more of the purchase price than the other. The amount of the taxable gift in such a situation generally equals the value of the gift that exceeds the contributing party’s unused gift tax annual exclusion amount $19,000 in 2025.² This assumes that no legally binding obligation to support exists between the parties, as often exists in the case of a domestic partnership or civil union.

Further, the property may be included entirely in the deceased partner’s estate upon his or her death unless the surviving partner is able to show that he or she contributed to the purchase price of the asset.³ On the other hand, a legally married couple is able to take advantage of both the marital deduction and portability options when jointly owned property is involved.

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1. IRC § 2040.

2. IRC § 2503; Treas Reg. § 25.2511-1(h)(5).