Generation Skipping Transfer Tax

[niyati]

Can someone explain what the Generation-Skipping Transfer Tax is and when it applies intax?

 

[jainnorton]

The Generation-Skipping Transfer Tax (GSTT) is a federal tax on gifts/inheritances skipping a generation (e.g., grandparent to grandchild). It applies when transfers exceed the lifetime exemption ($13.61M in 2024).

 

[maria]

Generation-skipping transfer tax refers to a federal tax on either a gift or an inheritance that avoids the ability of a donor to not pay any estate taxes by neglecting the children to target the grandchildren. In the case of generation-skipping transfer tax, the grandchildren do not get any more than they would get under an inheritance coming directly via parents.