Reporting Generation Skipping Transfers on Form 709 (Completed)

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Generation Skipping Transfer (GST) tax layers on top of Gift Tax when lifetime transfers are made to much younger generations or set aside in trust for their benefit. As illustrated by the proliferation of private letter ruling requests, practitioners frequently misunderstand the importance of properly reporting generation skipping transfers and properly allocating the available exemption. This course will review the foundations of GST tax and explain when to elect out of the automatic allocation rules or when Schedule D for Form 709 should be completed. Examples of direct and indirect transfers will be reviewed along with the automatic allocation rules.

Topics Covered

• Summary of the GST tax and how to apply the lifetime GST tax exemption to mitigate tax liability
• Description of the consequences of incorrectly or failing to allocate the GST tax lifetime exemption to direct and indirect transfers and how to fix allocation mistakes
• Explanation of the ideal allocation of the GST tax lifetime exemption and calculation of the inclusion ratio for indirect skips
• Illustration of properly and improperly allocated exemptions and the problem with relying on the automatic allocation rules

Learning Objectives

• Describe when GST tax applies in addition to gift tax
• Analyze when to file Form 709, Schedule D to allocate the lifetime GST tax exemption
• Allocate the GST tax exemption to direct and indirect skips to shelter lifetime transfers
• Recommend optimal asset allocation and planning techniques to minimize GST tax

Level
Intermediate

Instructional Method
Group: Internet-based

NASBA Field of Study
Taxes (2 hours)

Program Prerequisites
A general understanding of gift tax will be helpful before taking this course.

Advance Preparation
None