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 Montana (MT), as in all states across the United States, the federal gift tax applies to the transfer of property from one person to another when the transfer is made without receiving something of equal value in return. This includes money, real estate, and other types of property. If a person sells an item for less than its fair market value or extends a loan without interest or at a reduced interest rate, this can also be considered a gift for tax purposes. 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 adjusted periodically for inflation. As of the knowledge cutoff in 2023, the annual exclusion amount is $16,000 per recipient per year. Gifts above this amount may require the filing of Form 709 and could potentially be taxable, although there are lifetime exemptions and other exclusions that may apply. It's important to consult with an attorney or tax advisor for specific advice related to gift tax implications.