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.

In Maine, as in all states, the federal gift tax applies to transfers of property where the donor does not receive full value in return. This includes money, real estate, and other types of property. If a person gives a gift that exceeds the annual exclusion limit set by the IRS, they may need to file a Form 709, which is the United States Gift (and Generation-Skipping Transfer) Tax Return. The annual exclusion amount is adjusted periodically for inflation. For 2023, the annual exclusion is $17,000 per recipient. Gifts that exceed this amount may require the filing of Form 709 and could potentially trigger the gift tax, depending on the donor's lifetime gift tax exemption. It's important to note that the gift tax is a federal tax and does not vary by state, so the regulations in Maine are the same as those enforced by the IRS federally. Maine does not impose a separate state gift tax.