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 a nationwide tax that applies to individuals in all states, including Hawaii (HI). It is imposed on the transfer of property by one person (the donor) to another (the donor) without receiving something of equal 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, this can also be considered a gift for tax purposes. Each individual has an annual gift tax exclusion amount, beyond which they must file IRS Form 709 to report the gift. The instructions for Form 709 provide further details on how to comply with the federal gift tax regulations. It's important to note that while the federal gift tax rules are uniform across the United States, Hawaii does not impose a separate state gift tax. However, Hawaii residents must still comply with the federal regulations.