DESCRIPTION
This module provides a comprehensive overview of Generation-Skipping Transfer (GST) taxation, including its purpose, core terminology, and key structural concepts. Participants examine who qualifies as a skip person, the distinctions between lineal and non-lineal descendants, when trusts are treated as skip persons, and how special rules—such as the deceased parent exception and the move-down rule—affect skip-person determinations. The course explores GST trigger events—direct skips, taxable terminations, and taxable distributions—and explains which parties bear the resulting tax liability. Participants also learn how to compute GST tax through application of the inclusion ratio and applicable rate, with concepts reinforced through hypothetical client fact patterns, computations, visual explanations, and group discussions.
LEARNING OBJECTIVES
- Explain the purpose and policy rationale underlying Generation-Skipping Transfer (GST) taxation and its role within the federal transfer tax system.
- Identify key GST terminology and determine when an individual or trust qualifies as a skip person, including distinctions between lineal and non-lineal descendants.
- Differentiate between direct skips, taxable terminations, and taxable distributions, including which party bears the GST tax liability for each event.
- Analyze client fact patterns to determine whether a GST trigger event has occurred and classify the applicable GST event type.
- Compute the GST tax based on specific fact patterns, including when to applying the inclusion ratio and applicable rate to fact-specific transfers.
