Gifting a Partner for a Down Payment - Good or Bad Idea?

[Ryan Wiley]

Scenerio:

My fiance and I are buying an investment property together. The bank advised us not to apply for the mortgage together because her income has essentially nil for the last year; however, she has substantial assets that we will use for the down payment. My income is enough to be approved for the mortgage, so I will be the only signatory on it, while we will both be on the deed.

Our plan was for her to "gift" me the funds and apply the fund to the down payment. The bank holding the note is fine with is. The bank liquidated the assets for the down payment, however, raised some concerns. They believe that while we are gifting the money, this is technically a loan, since she will be on the deed.

Are there any recommendations on how to structure this? Obviously, we'd like to avoid the gift tax, if possible.