A gift tax is a tax levied on the transfer of property or assets from one individual to another without receiving fair market value in return.

In the United States, the gift tax is imposed by the Internal Revenue Service (IRS) on the donor, or the person giving the gift, rather than the recipient. The gift tax is intended to prevent individuals from avoiding the estate tax by giving away their assets before they die.

In general, any gift given above a certain amount (called the annual exclusion) must be reported to the IRS and may be subject to the gift tax. The annual exclusion limit is determined by the IRS and may change each year.

The gift tax rate can also vary depending on the total value of gifts given during the donor’s lifetime. However, there are certain exemptions and exclusions that may apply, such as gifts to a spouse or qualified charitable organizations.

It is important to consult with a tax professional to determine the potential gift tax implications of any significant transfers of property or assets.