What type of taxes are imposed on money transfers made during an individual's lifetime?

Gift taxes are specifically imposed on the transfer of money or property from one individual to another without receiving something of equal value in return. This tax applies to gifts made during an individual's lifetime, reflecting the idea that such transfers can reduce the wealth of the giver while potentially improving the financial situation of the recipient. The purpose of gift taxes is to prevent individuals from avoiding estate taxes by giving away their wealth before they pass away.

In contrast, estate taxes are levied on the entire value of a deceased person's estate before distribution to heirs, while sales taxes apply to retail sales of goods and services. Property taxes are ongoing taxes based on the ownership of real estate. Each of these other types of taxes serves different functions and applies under different circumstances, making gift taxes uniquely relevant to living individuals making transfers of wealth.