Alerts

Deemed Allocations Of Generation-Skipping Transfer Tax Exemption To Certain Trusts

September 1, 2005

As a reminder, a few years ago, the IRS adopted certain rules regarding the automatic allocation of a taxpayer's exemption from the generation-skipping transfer tax ("GST tax") to transfers to certain types of trusts beginning in 2001.  The GST tax is a tax that applies to certain transfers to grandchildren and more remote descendants.  Under current law, each person has a $1.5 million exemption from this tax.  This exemption is scheduled to increase to $2 million in 2006 and to $3.5 million in 2009.