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 Ohio. It is imposed on the transfer of property by one person to another when the transfer is made without receiving something of equal value in return. This tax is not specific to any state, as it is governed by federal law. In Ohio, as in other states, individuals must consider the federal gift tax rules when transferring money, real estate, or other property. The donor is typically responsible for paying the gift tax. However, there are annual exclusions and a lifetime exemption amount that may apply, reducing or eliminating the gift tax liability. For 2023, the annual exclusion is $17,000 per recipient, and the lifetime exemption amount is $12.92 million. Transfers between spouses, payments for tuition or medical expenses, and donations to political organizations or charities may also be exempt. For precise calculations and reporting of gift taxes, individuals should refer to IRS Form 709 and its instructions.