· Tax imposed for each CY on the transfer of property by gift during such CY by any individual, resident or nonresident. § 2501(a)(1).
o Applies whether the transfer is in trust or otherwise, whether the gift is direct or indirect, and whether the property is real or personal, tangible or intangible. § 2511(a).
o In the case of nonresident noncitizens, only applies if transferred property is situated within the United States. § 2511(a).
· Gift tax is not imposed upon receipt of the property by the donee, nor is it necessarily determined by the measure of enrichment resulting to the donee from the transfer, nor is it conditioned upon ability to identify the donee at the time of the transfer. Rather, the tax is a primary and personal liability of the donor. § 25.2511-2.
· Gift is complete when:
o Donor retains no power to change the gift’s disposition, whether for his own benefit or for the benefit of another. § 25.2511-2(b).
§ Donor is considered having a power if it is exercisable by him in conjunction with any person not having a substantial adverse interest in the disposition of the transferred property or the income therefrom. Trustee is not a person having an adverse interest. § 25.2511-2(e).
§ No completed gift if donor transfers property to another in trust to pay the income to the donor, and the donor retains a testamentary power to appoint the remainder among his descendents.
§ If donor does not retain testamentary power but instead provided that the remainder should go to X or his heirs, the entire transfer would be a completed gift.
o Donor retains only the power to change the manner or time of enjoyment. § 25.2511-2(d).
§ Donor can reserve power to withhold payment of income and instead accumulate income and distribute such with the corpus to the donee at the termination of the period.
o Donor transfers property to himself as trustee and retains no beneficial interest in the trust property and no power over it except fiduciary powers, the exercise or nonexercise of which is limited by a fixed or ascertainable standard, to change the beneficiaries of the transferred property. § 25.2511-2(g).
o Donor delivers a properly endorsed stock certificate to the donee or the donee’s agent. § 25.2511-2(h).
§ If delivered directly to the donee or donee’s agent, the gif
buy or sell, and both having reasonable knowledge of relevant facts. § 25.2512-1.
· Retail Items — value is FMV at which the item or a comparable item would be sold at retail. § 25.2512-1.
· Stocks & Bonds — value is FMV per share or bond on the date of the gift. § 25.2512-2(a).
o If the stock or bond is traded on a stock exchange or over-the-counter market or similarly, the mean between the highest and lowest quoted selling prices on the date of the gift is the FMV per share or bond. § 25.2512-2(b)(1).
§ If no sales on date of gift, but there were sales on dates within a reasonable period both before and after the date of the gift, the FMV is the weighted average of the means between the highest and lowest sales on the nearest date before and the nearest date after the date of the gift. The average is to be weighted inversely by the respective numbers of trading days between the selling dates and the date of the gift.