Tax Analysts, a leading provider of tax news, analysis, and commentary, covers estate, gift, and inheritance tax issues, including those in the area of generation-skipping taxation.
The generation skipping transfer tax (GSTT), described at 26 U.S.C. 2611, was created to tax transfers of property at each generation, thereby preventing tax benefits to generation-skipping transfers (GST), which shift property by gift or death to a person or persons two or more generations below the transferor.
A generation-skipping transfer is a taxable distribution, a taxable termination, or a direct skip (section 2611, defined in reg. section 26.2612-1). Skip persons and non-skip persons are defined at section 2613, taxable amounts in cases of taxable distributions and taxable terminations at sections 2621 and 2622. The tax consequences of direct skips are addressed at section 2623, while the taxation of multiple skips is at 2653.
Each person has an exemption from the GST tax. This amount is calculated over the person’s lifetime, and is indexed for inflation with respect to the year in which any transfers are made. See, for example, Rev. Proc. 2014-61. Married couples may split the amount of a generation-skipping transfer to take advantage of both spouses’ available exemption amounts.
In addition to Code and regulation text associated with generation-skipping transfer taxes, Tax Analysts also publishes related IRS guidance and publications (Publication 17), court cases, and legislative actions, with timely, concise, and accurate summaries and commentary of these items.