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 Wisconsin, as in all states, the federal gift tax rules apply. The donor is typically responsible for paying the gift tax. However, there are annual and lifetime exclusions that allow individuals to give gifts up to a certain amount without incurring a tax liability. As of the knowledge cutoff in 2023, the annual exclusion is $16,000 per recipient, and there is also a lifetime exemption amount that is adjusted for inflation. Gifts that exceed the annual exclusion amount must be reported to the IRS using Form 709. It's important to note that the state of Wisconsin does not impose a state-level gift tax, so only the federal regulations apply. Individuals considering making significant gifts should consult with an attorney or tax advisor to understand the potential tax implications and reporting requirements.