EST2303. Generation Skipping Transfer Tax: Myths and Mysteries

The generation-skipping transfer tax (GST) is a wonderfully complex tax that can cause problems and create opportunities for clients, planners, and return preparers. We will bust GST myths and solve GST mysteries while discussing a range of misconceptions about the GST. Myths busted will include that (i) only rich clients have to worry about the GST, (ii) gifts that qualify for the annual exclusion never trigger GST, and (iii) the automatic allocation rules will always save you. Mysteries explored will include (i) the different treatment of the various types of split-interest charitable trusts, (ii) when an inclusion ratio becomes final, and (iii) the various GST elections that can be made on a gift tax return.

Learning Objectives:

• Identify common misconceptions about the generation-skipping transfer tax.
• Distinguish between gift tax rules and GST rules and analyze the importance of those differences.
• Apply this information to common circumstances that arise in tax planning and return preparation regarding generation-skipping transfers.