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 individuals who transfer property without receiving something of equal or greater value in return. This includes money, real estate, or other assets. In North Carolina, as in all states, the federal gift tax regulations are enforced by the Internal Revenue Service (IRS). The donor is typically responsible for paying the gift tax. However, there are annual exclusions and a lifetime exemption amount that may apply, reducing or eliminating the gift tax liability. As of the knowledge cutoff in 2023, the annual exclusion allows an individual to give up to a certain amount per recipient per year without incurring a gift tax. Amounts above the annual exclusion may count against the lifetime exemption. For gifts that exceed these thresholds, IRS Form 709 must be filed. It's important to consult with an attorney or tax advisor for specific advice, as tax laws are subject to change and can involve complex considerations.