Generation-Skipping Transfer Tax (Portfolio 850)

Description

The Bloomberg Tax Portfolio, Generation-Skipping Transfer Tax, No. 850, discusses the generation-skipping transfer tax, enacted as chapter 13 of the Internal Revenue Code by the Tax Reform Act of 1986.

The generation-skipping transfer tax is imposed on transfers, whether outright or in trust, to a transferee who is at least two generations below the transferor’s generation. The tax is a flat rate equal to the maximum estate tax rate at the time of the transfer, subject to the allocation of the GST exemption available for each transferor.

The Portfolio explains the background of chapter 13, key terms, rules for allocating GST exemption, rules for separate shares and trusts, tax computation and liability rules, administration of the tax, and the coordination of the tax with other Code provisions. The Portfolio also discusses the history of the tax and the effective date and transitional rules. Examples are used to illustrate and discuss various issues.

This Portfolio may be cited as Harrington, 850 T.M., Generation-Skipping Transfer Tax.

Table of Contents

I. Background and Overview of the Generation-Skipping Transfer Tax
II. Transferor, Interest, Skip and Non-Skip Person, Trust
III. Generation Assignment
IV. Taxable Transfers
V. GST Exemption and Inclusion Ratio
VI. Separate Shares and Separate Trusts; Splitting Trusts and Other Restructuring
VII. Computation of the Tax and Liability
VIII. Administration, Returns, 9100 Relief and Other Procedural Issues
IX. Coordination with Other Code Sections
X. Application to Nonresident Aliens
XI. Effective Dates and Transitional Rules