The federal gift tax is a tax on the transfer of property from one individual (the donor) to another (the donee) when the donor receives nothing—or less than full value—in return. The tax applies whether the donor intends the transfer to be a gift or not.

The gift tax applies to the transfer of a gift of any type of property. You make a gift if you give property (including money) or the use of or income from property without expecting to receive something of at least equal value in return. If you sell something at less than its full value or if you make an interest-free or reduced-interest loan, you may be making a gift.

For additional information, see Internal Revenue Service (IRS) Form 709 and its instructions.

The federal gift tax is applicable to all individuals in the United States, including those residing in Arkansas (AR). It is imposed on the transfer of property by one person to another when the transfer is made without receiving something of equal value in return. This tax is not specific to any state, as it is governed by federal law. The Internal Revenue Service (IRS) oversees the administration of the gift tax, and individuals must report such transfers using IRS Form 709. As of the knowledge cutoff in 2023, individuals can gift up to a certain amount per year to any number of people without incurring the gift tax, which is known as the annual exclusion. Additionally, there is a lifetime exemption amount that allows individuals to transfer a significant amount of assets tax-free over their lifetime. Any gift exceeding the annual exclusion amount must be reported, but may not necessarily result in tax due, depending on the donor's remaining lifetime exemption. It's important for individuals in Arkansas to consult with an attorney or tax advisor to understand the implications of the federal gift tax on their specific financial situation.