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 Florida, as in all states across the United States, the federal gift tax applies to transfers of property where the donor does not receive full value in return. This includes money, real estate, and other types of property. If a person gives a gift that exceeds the annual exclusion limit set by the IRS, they may need to file a Form 709, which is the United States Gift (and Generation-Skipping Transfer) Tax Return. For 2023, the annual exclusion amount is $17,000 per recipient. Gifts that do not exceed this amount per year per recipient do not require Form 709 to be filed and are not subject to the gift tax. It's important to note that there is also a lifetime exemption amount, which is $12.92 million for 2023. This means that an individual can give away up to this amount over their lifetime without incurring a gift tax. The gift tax is a federal tax and does not vary by state, so the rules are consistent across the country, including in Florida. However, Florida does not impose a state-level gift tax, so only the federal regulations apply.
