Tim gave his house in another city to his sister. He had to pay taxes to the government on this transfer. What type of tax did the government levy?

A. estate tax

B. excise tax

C. gift tax

D. property tax

E. sales tax

The answer is "C. gift tax".

A gift tax is a government imposed tax to an individual giving anything of significant worth to someone else. For something to be viewed as a gift, the getting party can't pay the supplier full an incentive for the gift, however may pay a sum not as much as its full esteem. It is the provider of the blessing who is required to settle the blessing government expense. The collector of the gift may pay tax on the gift regulatory expense, or a level of it, on the supplier's benefit, if the provider has surpassed his/her yearly personal gift tax deduction limit.

Gift tax