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 Tennessee (TN). It is imposed on the transfer of property by one person (the donor) to another (the donee) without receiving full 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, it may also be considered a gift for tax purposes. Each individual has an annual gift tax exclusion amount, which allows them to give up to a certain value per recipient per year without incurring the gift tax. Beyond this exclusion, the donor must file IRS Form 709 to report the gift. The lifetime gift tax exemption also plays a role in how much an individual can give without incurring taxes over their lifetime. It's important to consult with an attorney or tax advisor to understand the implications of gift tax regulations and any potential state-level tax obligations.