How is a "gift" defined under donor's tax law?

A "gift" under donor's tax law is defined as a transfer of property for less than full consideration, done voluntarily. This definition captures the essence of what constitutes a gift in the eyes of the law. The key elements are that the transfer must be voluntary, meaning that the donor intends to make the gift without expecting anything in return, and that it is done for less than full value, indicating that the transfer is made without a complete exchange of value.

This understanding is essential because it distinguishes gifts from transactions or sales, where full consideration (the fair market value of the property) is exchanged. In the context of donor's tax, recognizing the transfer as a gift rather than a sale has significant implications for taxation purposes. Gifts are subject to different tax rules, often involving thresholds and exemptions that do not apply in a standard sale.

Other options each present scenarios that do not align with the legal definition of a gift. For example, a transfer of property for full consideration reflects a sales transaction rather than a gift. A forced transfer implies coercion or obligation, which contradicts the voluntary nature required for a gift. A casual transfer among family members may not always meet the criteria of being made for less than full consideration and could include transactions that are more