What does the gift tax generally apply to?

The gift tax generally applies to the transfers of property from one individual to another without receiving something of equal value in return, making option relating to transfers of property to others other than a spouse correct. The gift tax is designed to ensure that individuals cannot simply give away their assets to avoid taxation, especially when considering estate taxes at death.

While transfers to a spouse are generally exempt from gift tax due to the marital deduction, gifts to individuals other than a spouse may trigger the gift tax depending on their value and other factors. This ensures that substantial asset transfers remain subject to taxation unless they fall under specific exclusions or exemptions.

Gifts to political organizations and charities are typically exempt from gift tax, which is why those options are not applicable in a general sense. Additionally, gifts made below the annual exclusion limit also do not incur gift tax liability, highlighting the distinction of the correct option.