Is giving my girlfriend money for her mortgage closing costs and down payment considered fraud?
"With the standard ""I am not a lawyer"" disclaimer, consider this question: If you and your girlfriend split up sometime after purchasing the house but before getting married, would you expect her to repay you for the closing costs and downpayment?  That is, if you write her a check for $5k, and 6 months after she signs the papers for the house one of you decides to break up with the other, would you expect her to write you a check for $5k in return?   That is the difference between ""a gift"" and ""a loan disguised as a gift"".  If the answer is no, you don't expect it back, then everything is fine and you're in the clear - it's perfectly legal to give someone money.  If the answer is yes, you would want to be ""paid back"", then it's not a gift and you run the risk of running afoul of the regulations.   With respect to a previous answer about ""gifting money that is not taxed"", in the US one person can give another up to $14,000 without worrying about gift taxes, and even in the event that you exceed that amount, the excess would simply eat into the lifetime exemption of $5,250,000.  (Individual states may have different rules and exempt amounts that would apply to state taxes.)   Please also consider the income issue for your ""rental agreement"".  Your GF would be expected to declare that amount and pay income tax on it as a business.  She might also declare part of that amount as expected income for purposes of securing the loan, but that may run into its own issues (you're not a roommate, and presumably the home is not a duplex or set up as apartments, and presumably she would not offer a similar deal to someone other than you)." When you purchase a mortgage, you have to prove the source of your down payment.  Primarily this is so that the mortgage lender knows that there are no other outstanding liens against the property.  If you show that some or part of your down payment was a gift, there is no fraud, but it may affect your qualification for the mortgage. Consult a lawyer in your area to determine if there is a legal way to gift the money that is not taxed.  If all else fails you could just pay the tax.  Also, you should research whether your gift is above the floor of taxable gifts. "you have 2 concerns: the lender and the irs. either way you should be fine the lender just wants to know that you have no legal claim to the property or other compensation. simply signing a gift declaration should clear that up, making this a ""gift"" from their perspective.  they probably have some standard form you can sign. otherwise, just a simple note that says ""i, so-and-so, gave whats-er-name x$ on the y of june, 20## as a gift, with no expectation of repayment"".  then, only way you could get charged with ""fraud"" is if you seek compensation for this ""gift"" in the future.  even then, the bank would probably have to find out about the compensation and complain pretty strongly to get a prosecutor interested in a small dollar misrepresentation case with little or no provable intent. a bigger concern is the bank being uncomfortable with the future renter also giving a gift. that just ""smells weird"". and bankers hate anything weird. it probably won't prevent the mortgage from getting approved, but it might delay the underwriters a few days while the wring their hands about it. the irs is a bit more complicated. they tend to be the ""heads we win, tails you lose"" types.  assuming they consider this a gift, then you are fine, since it is under the annual gift exclusion (~14k$ these days); you don't even have to tell them about it.  however, if she gives you a large financial gift in the near future, they may decide to interpret those two events as a single transaction turning this into a no interest loan. even then, you should be fine since the irs generally doesn't care about loans under 100k$ with ""missing"" interest under 1k$/yr. since this is a small loan and interest rates are so low, you have no worries. further irs reading on gift loans: https://www.law.cornell.edu/uscode/text/26/7872" It's a gift if there are no strings attached. If you are rationalizing it to try to make it a gift for tax or any other purpose when there really is a connection between the transactions, or when you expect any kind of value or benefit in return for it, then it's not a gift... don't make it one and don't call it one. That would indeed likely be fraud. Play be the rules and sleep easy, is how I like to live. "Sheesh, are people kidding here? It's a gift. It's not fraud. Just keep in mind that, because it's a gift, you cannot get it ""back"" if you break up--you are giving it to her. If you happen to get married at some point in the future, you will then own part of the apartment, but that is a completely separate matter. Give her the money, don't expect it back. Ever." The issue here is that the transaction (your funds to her account) looks very similar to the rent payments which you plan to make in the future. Those rental payments (if deemed to be commercial) would normally be subject to tax. Consider the scenario where rather than an up front $5000, and $5000 over 2 years, you paid her $10000, and paid no rent. That might be an attempt to avoid paying tax. A commercial transaction can't be re-labeled as a gift just based on your election - the transaction needs to be considered as a whole. However, an interest free, unsecured loan connected with you paying rent at market rate would be (depending on local laws) simply foolish (to some extent). I don't think you are able to structure the transaction as a joint purchase (since the mortgage will prevent her from allocating a part of the property to you). Its also likely that you can live in her house and contribute an adequate amount to the household costs without creating a taxable income for her. For example in the UK, up to ~£4000 pa rental income generated from the property in which you reside does not need to be declared. You need to identify the scenarios where your particular arrangement could be imagined as resulting in a taxable or potentially taxable event - then make sure you are not avoiding those events just by choosing how you label the events. Regarding the mortgage company, they will want to know where the down payment came from, and as long as you are honest about it, there is no fraud. It's possible that the mortgage company may have some reservations about the deal now that they know where the down payment came from, but that will depend on the size of the deal and other factors. If everyone involved has decent credit, and this is a fairly standard mortgage, it will probably have no impact at all. Omg, the answer is easy. Tell the TRUTH, and nothing is fraud. Down payment gifts are SOP's, and every lender works with that. EACH lender has their own rules. Fannie May and Freddie Mac could care less, and FHA and VA backed loans allow for full gifting unless the buyer's credit is below the standard 620, then 3.5% must come from the buyer. Standard bank loans want to know the source of the down payment for ONE REASON ONLY: to know if the buyer is taking ON A NEW DEBT! The only thing you will need do is sign a legal document stating the entire down payment is a gift.  That way the bank knows their lendee isn't owing a new substantial debt, and that there aren't two lenders on the house, because should she default, the bank will have to pay you back first off the resale. Get it? They just want to know how many hands are in the fire. There is not any fraud involved. Anybody can gift money to another person. "There are several areas of passive fraud by being unclear on what you are doing.  When a citizen buys a house, the mortgage lender wants all the details as to how the buyer rounded up the money.  That is so they can use their own formulas to assess the buyer's creditworthiness and the probability that the buyer will be able to keep up on payments, taxes and maintenance; or have they overextended themselves. The fraud is in the withholding of that info. By way of tricking them into making a favorable decision, when they might not have if they'd had all the facts.  Then there's making this sound all lovey-dovey, good intentions, no strings attached, no expectations. You're lying to yourself.  What you've actually done is put money between yourselves, because you have not laid down FAIR rules to cover every possibility.  You're not willing to plan for failure because you don't want to admit failure is possible, which is vain.  Once you leap into this bell jar, the uncertainty of ""what happens if..."" will intrude itself into everyone's thoughts, slowly corroding your relationship.  It's a recipe for disaster.  That uncertainty puts her in a very uncomfortable position.  She has to labor to make sure the issue doesn't explode, so she's tiptoeing around you to avoid fights.  Every fight, she'll wonder if you'll play the breakup card and threaten to demand the money back.  The money will literally come between you. This is what money does.  Thinking otherwise is a young person's mistake of inexperience.  Don't take my word on it, contact Suze Orman and see what she says. Your lender is also not going to like those poorly defined lovers' promises, because they've seen it all before, and don't want to yet again foreclose on a house that fighting lovers trashed.  (it's like, superhero battles are awesome unless you own the building they trashed.)  This thing can still be done, but to remove this fraud of wishful thinking, you need to scrupulously plan for every possibility, agree to outcomes that are fair and achievable, put it in writing and share it with a neutral third party.  You haven't done it, because it seems like it would be awkward as hell - and it will be! - Or it will test your relationship by forcing direct honesty about a bunch of things you haven't talked about or are afraid to - and it will! - And to be blunt, your relationship may not be able to survive that much honesty.  But if it does, you'll be in much better shape.   The other passive fraud is taxes.  By not defining the characteristics of the payment, you fog up the question of how your contribution will be taxed (if it will be taxed). A proper contract with each other will settle that.  (there's an argument to be made for involving a tax advisor in the design of that contract, so that you can work things to your advantage.)  As an example, defining the payment as ""rent"" is about the worst you could do, as you will not be able to deduct any home expenses, she will need to pay income tax on the rent, but she can cannot take landlord's tax deductions on anything but the fraction of the house which is exclusively in your control; i.e. none."
Which way would save the most money? Paying of the car today would save the most money.  Would you borrow money at 20% to put it in a savings account?  That's effectively what she is doing by not paying off the car. If it were me, I would pay off the car today, and add the car payment to my savings account each month.  If the car payment is $400, that's $1,500 a month that can be saved, and the $12k will be back in 8 months. That said - remember that this is your GIRLFRIEND, not a spouse.  You are not in control (or responsible for) her finances. I would not tell her that she SHOULD do this - only explain it to her in different ways, and offer advice as to what YOU would do.  Look together at how much has been paid in principal and interest so far, how much she's paying in interest each month now, and how much she'll pay for the car over the life of the loan.  (I would also encourage her not to buy cars with a 72-month loan, which I'm guessing is how she got here). In the end, though, it's her decision. "My suggestion would be that you're looking at this the wrong way, though for good reasons.  Once you are a family, you should - and, in most cases I've seen, will - think of things differently than you do now. Right now, your post above is written from a selfish perspective.  Not to be insulting, and not implying selfish is a bad thing - I don't mean it negatively.  But it is how you're defining this problem: from a self-interested, selfish point of view.  ""Fair"" and ""unfair"" only have meaning from this point of view; something can only be unfair to you if you come from a self-centered viewpoint. Try to think of this from a family-centric viewpoint, and from your significant other's point of view. You're absolutely right to want both of you to be independent financially as far as is possible; but think about what that means from all three points of view (your family's, yours, and hers)? Exactly what it means will depend on the two of you separately and together, but I would encourage you to start with a few basics that make it likely you'll find a common ground: First of all, ensure your significant other has a retirement account of her own that is funded as well as yours is.  This will both make life easier if you split up, and give her a safety net if something happens to you than if you have all of the retirement savings.  I don't know how your country manages pensions or retirement accounts, but figure out how to get her into something that is as close to equal to yours as possible. Make sure both of you have similar quality credit histories.  You should both have credit cards in your own names (or be true joint owners of the accounts, not just authorized users, where that is possible), and both be on the mortgage/etc. when possible.  This is a common issue for women whose spouse dies young and who have no credit history.  (Thanks @KateGregory for reminding me on this one) Beyond that, work out how much your budget allows for in spending money for the two of you, and split that equally.  This spending money (i.e., ""fun money"" or money you can do whatever you like with) is what is fundamentally important in terms of financial independence: if you control most of the extra money, then you're the one who ultimately has control over much (vacations, eating out, etc.) and things will be strained.  This money should be equal - whether it is literally apportioned directly (each of you has 200 a month in an account) or simply budgeted for with a common account is up to you, whatever works best for your personal habits; separate accounts works well for many here to keep things honest. When that money is accounted for, whatever it is, split the rest of the bills up so that she pays some of them from her income.  If she wants to be independent, some of that is being in the habit of paying bills on time.  One of you paying all of the bills is not optimal since it means the other will not build good habits.  For example, my wife pays the warehouse club credit card and the cell phone bill, while I pay the gas/electric utilities. Whatever doesn't go to spending money and doesn't go to the bills she's personally responsible for or you're responsible for (from your paycheck) should go to a joint account.  That joint account should pay the larger bills - mortgage/rent, in particular - and common household expenses, and both of you should have visibility on it.  For example, our mortgage, day-care costs, major credit card (which includes most of our groceries and other household expenses) come from that joint account. This kind of system, where you each have equal money to spend and each have some household responsibilities, seems the most reasonable to me: it incurs the least friction over money, assuming everyone sticks to their budgeted amounts, and prevents one party from being able to hold power over another. It's a system that seems likely to be best for the family as a unit.  It's not ""fair"" from a self-centered point of view, but is quite fair from a family-centered point of view, and that is the right point of view when you are a family, in my opinion. I'll emphasize here also that it is important that no one party hold the power, and this is set up to avoid that, but it's also important that you not use your earning power as a major arguing point in this system.  You're not ""funding her lifestyle"" or anything like that: you're supporting your family, just as she is.  If she were earning more than you, would you cut your hours and stay at home?  Trick question, as it happens; regardless of your answer to that question, you're still at the same point: both of you are doing the thing you're best suited for (or, the thing you prefer).  You're both supporting the family, just in different ways, and suggesting that your contribution is more valuable than hers is a great way to head down the road to divorce: it's also just plain incorrect.  My wife and I are in almost the identical situation - 2 kids, she works part time in the biological sciences while spending plenty of time with the kids, I'm a programmer outearning her significantly - and I can tell you that I'd more than happily switch roles if she were the bread earner, and would feel just as satisfied if not more doing so. And, I can imagine myself in that position, so I can also imagine how I'd feel in that position as far as how I value my contribution." You say  My work is steady; even if I lost my job it'd be easy to get another. Location has been static for a few years now, but I'm not sure that'll extrapolate to the future; I'm lazy, so I don't want to move, but for a significantly better job opportunity I wouldn't mind.   The general rule of thumb is that you'll come out ahead if you buy a house (with a mortgage) and live there for five years.  What you lose in interest, you make up in rent.  And living there for five years, you make back your closing costs in equity.  If you're there less than five years though, you don't make back the closing costs.  You'd have been better off renting.   Historically (up to about twenty years ago), your mortgage payment and rent payment for the same basic property would be about the same.  I.e. if your current landlord sold you what you are renting, your mortgage payment would be roughly the same as your rent.  Maybe a little lower or a little higher but about the same.  More recently, it hasn't been strange to see a divergence in those.  Now it is not uncommon for a mortgage payment to be 50% higher than rent on the same property.   This has some consequences.  First, your $1000 rent probably won't stretch as far as a $1000 mortgage payment.  So you'll be buying something that you'd only pay $650 or $700 rent.  Second, if you move and can't sell immediately, you'll get less in rent than you'd pay in mortgage.  Rather than contributing to your income, the property will require subsidy just to maintain the mortgage.  And in the early years of the mortgage, this means that you're paying all of the principal (equity) and some of the interest.   Buying a duplex makes this worse.  You have your side and their side.  You can substitute your $1000 rent for half of the mortgage payment.  Meanwhile, they are paying $700 in rent.  You have to subsidize the mortgage by $300.  Plus, you are talking about hiring a property management company to do things like lawn maintenance.  There goes another $100 a month.  So you are subsidizing the mortgage by $400.   I don't know real estate prices in Utah, but a quick search finds a median house price over $200,000.  So it seems unlikely that you are buying new construction with new appliances.  More likely you are buying an existing duplex with existing appliances.  What happens when they fail?  The renter doesn't pay for that.  The property management company doesn't pay for that (although they'll likely arrange for it to happen).  You pay for it.   Also, it often takes a bit of time to clean up the apartment after one tenant leaves before the new tenant starts paying rent.  That's a dead weight loss.  If this happens during a local recession, you could be carrying the mortgage on a property with no offsetting rental income for months.   There are some countervailing forces.  For example, if house prices in your area are increasing, the rent will increase with them (not necessarily at the same pace).  But your mortgage payment stays the same.  So eventually the rent may catch up with the mortgage payment.  If you wait long enough in a strong enough market, the rent on the other half of the duplex may cover the entire mortgage payment.   If you currently have an urban apartment within walking distance of work and switch to a suburban apartment with a commute, you have a better chance of finding a duplex where the entire mortgage payment is only the $1000 that you pay in rent.  Your half of the duplex won't be as nice as your apartment is, and you'll have a half hour or hour long commute every morning (and the same to get home in the evening).  But on strictly fiscal terms you'll be doing about as well.  Plus you have the income from the other half.  So even if your mortgage payment is more than your rent payment, you can still break even if the rent covers it.   Consider a $1400 mortgage and $400 in rent from the other half (after property management fees).  So long as nothing goes wrong, you break even.  Perhaps the agreement is that your parents take care of things going wrong (broken appliances, troublesome tenants, time between tenants).  Or perhaps you drain your emergency fund and adjust your 401(k) payment down to the minimum when that happens.  Once your emergency fund is replenished, restore the 401(k).   If you're willing to live in what's essentially a $500 apartment, you can do better this way.  Of course, you can also do better by living in a $500 apartment and banking the other $500 that you spend on rent.  Plus you now have the expenses of a commute and five hours less free time a week.   You describe yourself as essentially living paycheck to paycheck.  You have adequate savings but no building excess.  Whatever you get paid, you immediately turn around and spend.  Your parents may view you as profligate.  Your apartment is nicer than their early apartments were.  You go out more often.  You're not putting anything aside for later (except retirement).   It didn't use to be at all strange for people to move out of the city because they needed more space.  For the same rent they were paying in the city, they could buy a house in the suburbs.  Then they'd build up equity.  So long as they stayed in roughly the same work location, they didn't need to move until they were ready to upgrade their house.   The duplex plan leads to one of two things.  Either you sell the duplex and use the equity to buy a nicer regular house, or you move out of the duplex and rent your half.  Now you have a rental property providing income.  And if you saved enough for a down payment, you can still buy a regular house.   From your parents' perspective, encouraging you to buy a duplex may be the equivalent of asking you to cut back on spending.  Rather than reducing your 401(k) deposits, they may be envisioning you trading in your car for a cheaper one and trading in your nice but expensive apartment for something more reasonable in a cheaper neighborhood.  Rather than working with a property management company, you'll be out doing yardwork rather than cavorting with your friends.  And maybe the new place would have more space to share when you meet someone--you aren't going to provide many grandkids alone.   If you get a mortgage on a duplex, you are responsible for paying the mortgage.  You are responsible even if something happens to the house.  For example, if a fire burns it down or a tornado takes it away.  Or you just find that the house isn't solid enough to support that party where all of your friends are jumping up and down to the latest pop sensation.  So beyond losing whatever you invest in the property, you may also lose what you borrowed.   Now consider what happens if you invest the same amount of money in General Motors as in the house.  Let's call that $10,000 and give the house a value of $200,000.  With General Motors, even if they go bankrupt tomorrow, you're only out $10,000.  With the house, you're out $200,000.  Admittedly it's much hard to lose the entire $200,000 value of the house.  But even if the house loses $80,000 in value, you are still $70,000 in the hole.   You don't need a disaster for the house to lose $80,000 in value.  That's pretty much what happened in the 2006-2010 period.  People were losing all of what they invested in houses plus having to declare bankruptcy to get out of the excess debt.  Of course, if they had been able to hold on until 2015 markets mostly recovered.  But if you lost your job in 2008, they wouldn't let you not make mortgage payments until you got a new one in 2012.   When you declare bankruptcy, you don't just lose the house.  You also lose all your emergency savings and may lose some of your belongings.   There are some pretty prosaic disasters too.  For example, you and your tenant both go away for a weekend.  It rains heavily and your roof starts to leak due to weak maintenance (so not covered by insurance).  The house floods, destroying all the electronics and damaging various other things.  Bad enough if it's just you, but you're also responsible for the tenant's belongings.  They sue you for $20,000 and they move out.  So no rent and big expenses.  To get the house livable again is going to take $160,000.  Plus you have a $190,000 mortgage on a property that is only worth about $40,000.  That's at the extreme end. "This is more of a long comment but may answer user's situation too. I have dealt with joint mortgages before in 3 states in the US.  Basically in all three states if one party wants to sell, the home goes up for sale.  This can be voluntary or it can go up via auction (not a great choice). In 2 of the 3 states the first person to respond to the court about the property, the other party pays all legal fees.  Yes you read this right.  In one case I had an ex who was on my mortgage, she had no money invested in the house ($0 down and still in college with no job).  [If she wasn't on the mortgage I wouldn't have gotten loan - old days of dumb rules] When we split her lawyer was using the house as a way to extort other money from me.  Knowing the state's laws I already filed a petition for the property but put it on hold with the clerk.  Meaning that no one else could file but if someone tried mine would no longer be on hold.  My ex literally spent thousands of dollars on this attorney and they wanted to sell the house and get half the money from the house.  So sale price minus loan amount divided between us.  This is the law in almost every state if there is no formal contract.  I was laughing because she wanted what would be maybe 50-75K for paying no rent, no money down, and me paying for her college. Finally I broke her attorney down (I didn't lawyer up but had many friends who were lawyers advising).  After I told her lawyer she wasn't getting anything - might have said it in not a nice way - her lawyer gave me her break down.  To paraphrase she said, ""We are going to file now.  My assistant is in the court clerk's office.  You can tell the court whatever you want.  Maybe they will give you a greater percentage since you put the money down and paid for everything but you are taking that chance.  But you will pay for your lawyer and you will need one.  And you will pay for me the entire time.  And this will be a lengthy process.  You would be better served to pay my client half now."" Her office was about 2 blocks from court.  I laughed at her and simply told her to have her assistant do whatever she wanted.  I then left to go to clerk's office to take the hold off.  She had beat me to the office (I moved my car out of her garage).  By the time I got there she was outside yelling at her assistant, throwing a hissy fit, and papers were flying everywhere.  We ""settled"" the next day.  She got nothing other than the things she had already stolen from me.  If I wouldn't have known about this loophole my ex would have gotten or cost me through attorney's fees around 40-50K for basically hiring a lawyer.  My ex didn't really have any money so I am pretty sure lawyer was getting a percent. Moral of the story: In any contract like this you always want to be the one bringing in the least amount of money.  There are no laws that I know of in any country where the person with the least amount on a contract will come out worse (%-wise).  Like I said in the US the best case scenario that I know of for joint property is that the court pays out the stakeholder all of their contributions then it splits things 50/50.  This is given no formal contract that the court upholds.  Don't even get me started with hiring attorneys because I have seen the courts throw out so many property contracts it isn't even funny.  One piece of advice on a contract if you do one.  Make it open and about percentages.  Party A contributes 50K, Party B 10K, Party A will pay this % of mortgage and maintenance and will get this % when home is sold.  I have found the more specific things are the more loopholes for getting out of them. There are goofy ass laws everywhere that make no sense.  Why would the person first filing get their lawyers paid for???  The court systems in almost all countries can have their comical corners.   You will never be able to write a contract that covers everything.  If the shower handle breaks, who pays for it?  There is just too many one-off things with a house. You are in essence getting in a relationship with this person.  I hear others say it is a business transaction.   NO.  You are living with this person.  There is no way to make it purely business.  For you to be happy with this outcome both of you must remain somewhat friends and at the very least civil with each other.   To add on to the previous point, the biggest risk is this other person's character and state of mind.  They are putting in the most money so you don't exactly have a huge money risk.  You do have a time and a time-cost risk.  Your time or the money you do have in this may be tied up in trying to get your money out or house sold.  A jerk could basically say that you get nothing, and make you traverse the court system for a couple years to get a few thousand back. And that isn't the worst case scenario.  Always know your worst case scenario.  Yours is this dude is in love with you.  When he figures out 2-3 years later after making you feel uncomfortable the entire time that you are not in love with him, he starts going nuts.  So he systematically destroys your house.  Your house worth plummets, you want out, you can't sell the house for price of loan, lenders foreclose or look to sue you, you pay ""double rent"" because you can't live with the guy, and you have to push a scooter to get to work. That is just the worst case scenario.  Would I do this if I were 25 and had no family?  Yea, why not if I trusted the other person and was friends with them?  If it were just a co-worker?  That is really iffy with me.    Edit: Author said he will not be living with the person.  So wording can be changed to say ""potentially"" in front of living with him in my examples." This is an all too common problem and is not easy to resolve. Divorce agreements do not alter prior mortgage contracts. Most importantly, the bank is not required, and will not normally, remove the girlfriend from the mortgage even if she quitclaimed it to her Ex. If he has abandoned the property there is a good chance he will not make any more future payments. She should be prepared to make the payments if he doesn't or expect her credit to continue to deteriorate rapidly. She needs to contact her divorce attorney to review their mutual obligations. A court can issue orders to try to force the Ex to fulfill the divorce agreement.  However, a court cannot impose a change to the mortgage obligations the borrowers made to the bank. Focus on this. It's far more important than adding her to a car loan or credit card. Sorry for the bad news. As for the car loan, it's best to leave her off the loan. You will get better terms without her as a joint owner. You can add her as an additional driver for insurance purposes. Adding her to your credit cards will help her credit but not a lot if the mortgage goes to default or foreclosure. It sounds extremely fishy to me. Who has $750 in cash in his pocket and uses it to pay rent?? I would ask the tenant to show a statement from her checking account which shows that she took out that much cash in the days before the 'payment', and if she cannot provide it (or another convincing explanation), I would consider it a lie and request payment. "As soon as I see the word ""friends"" along with money transfer I think scam. But ignoring that red flag.... You will have American companies reporting to the IRS that you are a Canadian Vendor they have hired. Then you are transferring money to people in Bangladesh.  Assuming also that you fill out all the regulatory paperwork to establish this Money transfer business  you may still face annual reporting requirements to 3 national taxing authorities. In the United states there are situations where the US Government hires a large company to complete a project. As part of that contract they require the large company to hire small businesses to complete some of the tasks. In a situation where the large company is imply serving as a conduit for the money between the government and the sub-contractor; and the large company has no other responsibilities; the usual fee for providing that function is 8% of the funds. This pays for their expenses for their accounting functions plus profit and the taxes that will trigger. Yet you said ""At the end of the day, I will not earn much, but the transactions will just burden my tax returns.""  The 8 percent fee doesn't include doesn't include having to file paperwork with 3 nations.  Adding this to all the other risks associated with being an international bank, plus the legal costs of making sure you are following all the regulations...No thanks." "Not really. Unless you can show that there was an intent for you to have the money repaid (basically - a written loan agreement), no court will accept your claim.  This is one of the situations you can see frequently on ""Judge Judy"" and such, and the decision is always the same: unless there's a written (or you convince the judge about a verbal) agreement that it is a loan - it is a gift."