Generation-Skipping Transfer Tax Law and Legal Definition
A generation skipping transfer (GST) refers to the shift of property by gift or at death to a person who is two or more generations below that of the person granting the gift. The person giving the gift is referred to as the transferor and the recipient is known as the skip person.
The U.S. Generation-Skipping Transfer Tax imposes a tax on both outright gifts and transfers in trust to or for the benefit of unrelated humans more than 37 and a half years younger than the donor or to related persons more than one generation younger than the donor, such as grandchildren. The generation-skipping tax will be imposed only if the transfer avoids incurring a gift or estate tax at each generation level.
For example, property is placed in a trust for the donor's child and grandchildren. The income may be distributed among the child and grandchildren in accordance with their needs and the principal of the trust will be distributed outright to the grandchildren following the child's death. If the trust property is not subject to estate tax at the child's death, a generation-skipping tax will be imposed when the child dies.
Legal Definition list
- Generation Skipping
- Generally Applicable Environmental Radiation Standards
- Generally Accepted Standards of Clinical Practice
- Generally Accepted Auditing Standards [GAAS]
- Generally Accepted Accounting Principles [GAAP]
- Generation-Skipping Transfer Tax
- Generation-Skipping Transfers
- Generation-Skipping Trust
- Generic Campaign Activity
- Generic Drug
- Generic Mark
