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.

In Maine, as in all states, the federal gift tax applies to transfers of property where the donor does not receive full value in return. This tax is governed by federal law, not state law, and is administered by the Internal Revenue Service (IRS). The gift tax encompasses any type of property, including money, real estate, or other assets. If an individual gives away property, lends money without interest or at a reduced interest rate, or sells something for less than its fair market value, it may be considered a gift for tax purposes. Taxpayers in Maine must file IRS Form 709 if they make gifts that exceed the annual exclusion amount, which is $16,000 per recipient for 2023. There is also a lifetime exemption amount that individuals can use before they owe any gift tax. It's important to consult with an attorney or tax advisor for specific guidance, as the federal gift tax rules can be complex and may change over time.