In the United States, the gift tax is governed by Chapter 12, Subtitle B of the Internal Revenue Code.
[3] For taxable income, courts have defined a "gift" as the proceeds from a "detached and disinterested generosity.
There is no gift tax if it is intangible property, such as shares in U.S. corporations and interests in partnerships or LLCs.
Non-resident alien donors are allowed the same annual gift tax exclusion as other taxpayers ($14,000 per year for 2013 through 2016[9]).
Non-resident alien donors are subject to the same rate schedule for gift taxes.
Under 26 USC 102(c), the receipt of a gift, bequest, devise, or inheritance is not included in gross income.
Although many items might appear to be gifts, courts have held that the transferor's intent is the most critical factor.
While there are some statutory exemptions under this rule for de minimis fringe amounts and achievement awards, the general rule is the employee must report a "gift" from the employer as income for Federal income tax purposes.
In addition, under Internal Revenue Code section 102(b)(2), a donor may not circumvent this requirement by giving only the income and not the property itself to the recipient.
Permitting such an exclusion would allow the donor and the recipient to avoid paying taxes on the income received, a loophole Congress has chosen to eliminate.
[16] The intention was to rapidly generate revenue in the Great Depression, effectively encouraging avoidance of the estate tax by doing so, while lawmakers at the same time publicly, and in both House and Senate, proclaimed the exact opposite objective.
[18] The primary beneficiaries were the wealthiest citizens, whom the estate tax was supposedly designed to target since only they had enough money to make large gifts freely.