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 states in the U.S., including New Hampshire (NH). It is imposed on the transfer of property by one individual to another while receiving nothing or less than the property's full value in return. This tax is relevant regardless of the donor's intention for the transfer to be a gift. The tax encompasses all types of property transfers, whether it's money, real estate, or other forms of property. If a person sells an item for less than its market value or extends a loan without interest or at a reduced interest rate, it may also be considered a gift for tax purposes. The donor is typically responsible for paying the gift tax and must file IRS Form 709 if any gifts exceed the annual exclusion limit, which is adjusted periodically for inflation. As of the knowledge cutoff in 2023, the annual exclusion is $16,000 per recipient. Gifts between spouses, payments for someone else's medical and educational expenses paid directly to the institution, and donations to political organizations or charities may be exempt from the gift tax. It's important to consult with an attorney or a tax advisor for specific advice and to ensure compliance with current federal tax laws and regulations.