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 in all states, including Ohio, and is governed by federal law, not state statutes. 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 applies regardless of the donor's intent and includes money, real estate, or other types of property. If an individual sells something below 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. Each year, there is an annual exclusion amount for gifts that can be given without triggering the gift tax. Beyond this exclusion, the donor must file IRS Form 709 to report the gift. The lifetime exemption amount also plays a role in determining whether gift tax is due. It's important to consult with an attorney or tax advisor for specific guidance, as the IRS updates exemption amounts and tax rates periodically.