Generation Skipping Transfer: Trusts and Taxes

I.  Overview of the Generation-Skipping Transfer Tax

  1. Reason behind the GST Tax.  The federal generation-skipping transfer (“GST”) tax is primarily designed to prevent the tax-free transfer of wealth from a grandparent to his grandchild or great-grandchild. Prior to the advent of the GST tax, families could avoid the death tax that is imposed upon each generation by skipping a generation or two on at least a portion of the wealth. 
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We went over the “fiscal cliff”—if only for a few hours—now what?

Technically speaking, we actually went “over the fiscal cliff,” as many significant tax increases and spending cuts automatically took effect at the stroke of midnight on December 31, 2012.  Later that day, however, on January 1, 2013, retroactive legislation (going back at least several hours) passed the Senate, and then later the House.  Our new law, the American Taxpayer Relief Act of 2012 (ATRA), permanently extends important tax provisions and temporarily extends others.  > > > Read the full article

Brief History of Transfer (Estate, Gift, GST) Tax Laws

1797.  The first version of the estate tax was levied in the United States in 1797 for the specific and limited purpose of funding the formation of the U.S. Navy.

1862.  The Revenue Act of 1862 enacted an inheritance tax and introduced a gift tax for the first time in order to specifically fund the Civil War effort. > > > Read the full article