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 Vermont (VT). It is imposed on the transfer of property by one person (the donor) to another (the donee) without adequate consideration 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 provides a loan with no interest or at a reduced interest rate, this could also be considered a gift under the tax laws. The donor is typically responsible for paying the gift tax and must file IRS Form 709 if any gifts exceed the annual exclusion amount, which is subject to change each year. It's important to note that while the federal gift tax is a nationwide regulation, Vermont does not impose a separate state gift tax. However, Vermont residents must still comply with federal gift tax regulations and file the necessary forms with the IRS.