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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
Instructor
Klaralee R. Charlton
Klaralee Charlton is a Partner at 3i Law in Denver, Colorado. She practices fiduciary tax, estate administration, and business transactional law. As part of her practice, she guides clients through the process of administering a loved one’s estate including the collection, valuation, management and transfer of assets including financial accounts, real estate, and business interests with a focus on minimizing estate and income tax liability. Klaralee also works closely with trustees of ongoing trusts to ensure compliance and prepares clients’ fiduciary income tax returns annually.
Klaralee has written and lectured on topics including estate and gift tax, fiduciary income tax reporting and U.S. regulations governing the valuation of small family businesses. She is an active member of the Colorado Bar Association, Tax Section and Adjunct Profession at the University of Denver, Graduate Tax Program.
She earned her J.D. in 2011 from the University of Utah, S.J. Quinney College of Law, her LL.M. in Tax Law from the University of Denver in 2013, and her B.A. in political science in 2009 from Bryn Mawr College. She is admitted to practice in both Colorado and Montana.