IRS Issues Rules on Generation-Skipping Transfer Tax Exemption

The IRS released final rules detailing when more time will be given to taxpayers who want to use the generation-skipping transfer tax exemption.

The agency on Friday issued rules under Section 2642(g), (RIN 1545-BH63, TD 9996), over a decade after proposed rules on the topic were released.

A 40% generation-skipping transfer tax, or GST, generally applies when taxpayers transfer wealth to grandchildren. But there is an exemption amount under which the tax doesn’t apply.

• The 2017 tax law almost doubled the amount that could be directly sent to the grandchild without incurring the GST.
• The IRS adjusted the ...