Gift Subject to Reporting vs. Payment of Gift Tax

 1. The gift tax applies to transfers by gift of property (including money) without expecting to receive something of at least equal value in return, unless excluded. 

2. All transfers of money or property in trust is a taxable gift.

3. Valuation of Gifts of Property is at Fair Market Valu

"The fair market value is the price at which the property would change hands between a willing buyer and a willing seller, neither being under any compulsion to buy or to sell and both having reasonable knowledge of relevant

The fair market value of a particular item of property includible in the decedent's gross estate is not to be determined by a forced sale price. Nor is the fair market value of an item of property to be determined by the sale price of the item in a market other than that in which such item is most commonly sold to the public, taking into account the location of the item wherever appropriate." Treasury Regulation §20.2031-1