Gift tax in the United States
If a person is a non-resident alien for purposes of gift tax, taxation of gifts is determined in a different way. If the property is not located in the U.S., there is no gift tax. If it is intangible property, such as shares in U.S. corporations and interests in partnerships or LLCs, there is no gift tax.
Washburn v. Commissioner
In response to this and other cases (e.g. the "Ross Essay Contest" case, "McDermott v. Commissioner") holding that prizes constituted nontaxable gifts, Congress added § 74 to the 1954 Code. See S. REP. NO. 1622, 83d Cong., 2d Sess. 13, 178 (1954), reprinted in 1954 U.S. CODE CONG. & AD. NEWS 4621, 4813. Since enactment of § 74, courts have rejected the gift theory for prizes and awards. "See, e.g., Simmons v. United States," 197 F. Supp. 673 (D. Md. 1961), aff'd, 308 F.2d 160 (4th Cir. 1962); "Hornung v. Commissioner," 47 T.C. 428 (1967).