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I. The Generation-Skipping Transfer Tax
The current version of the GST tax, set forth in sections
2601-2664, was enacted under TRA 1986, in which Congress
substantively modified and retroactively repealed an earlier GST
tax regime enacted in 1976.2 The GST tax generally is imposed on
transfers, whether outright or in trust, to transferees who are
at least two generations below the generation of the transferor.
Secs. 2611, 2613(a). The public policy underlying the GST tax is
to bring uniformity and consistency to Federal transfer taxes
(estate, gift, and generation-skipping) by imposing a transfer
tax upon all transfers whether directly to an immediate
succeeding generation or to generations further removed from the
transferor. See Peterson Marital Trust v. Commissioner, 78 F.3d
795, 798 (2d Cir. 1996), affg. 102 T.C. 790 (1994); H. Rept. 99-
426, at 824, 1986-3 C.B. (Vol. 2) 1, 824.
A generation-skipping transfer is defined to include a
taxable distribution, a taxable termination, and a direct skip.
Sec. 2611(a). A direct skip means a transfer, subject to Federal
estate or gift tax, of an interest in property to a skip person.
Sec. 2612(c)(1). A skip person means a natural person assigned
to a generation which is two or more generations below the
generation of the transferor, or a trust if all interests in such
2 The first generation-skipping transfer tax was enacted as
part of the Tax Reform Act of 1976, Pub. L. 94-455, sec. 2006, 90
Stat. 1879-1890.
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Last modified: May 25, 2011