Generation-Skipping Transfer Tax Reporting and Planning

Reporting GSTT transactions and allocating a taxpayer's GSTT exemption on a federal gift tax return or estate tax can be complex. Although automatic allocation rules are meant to prevent the loss of GSTT exemption, failure to specifically allocate or not allocate this exemption in a timely manner, and to make this election timely, can result in wasting the exemption or subjecting heirs to unnecessary GSTT.

Many trust and estate professionals intentionally elect out of the automatic allocations in order to clearly elect a GSTT allocation and inclusion ratio. Most often, an inclusion ratio of one, none of the property is exempt from GSTT, or zero, all of the property is exempt from GSTT, is chosen. Properly making and reporting these elections is critical.

Trust and estate advisers can incorporate specific planning techniques to allow flexibility in future generations' estate plans. Powers of appointment can be utilized to provide a potential basis step-up for future heirs while avoiding GSTT tax. Trust and estate professionals need to understand how to plan and report these transfers to future generations properly.

Listen as our transfer tax expert explains how to properly report gifts to skip persons to best utilize the GSTT exemption and maximize assets passed to future generations.

1. GSTT: introduction
2. Skip persons
3. Allocation of exemption
4. Automatic allocations
5. Opting out of automatic allocations of GSTT
   1. Inclusion ratios
   2. Election statements
   3. Reporting
6. Late allocations
7. Planning techniques

The panel will review these and other critical issues:

• Reporting transfers to trusts on Forms 706, U.S. Estate (and Generation-Skipping Transfer Tax Return) and IRS Form 709, U.S. Gift (and Generation-Skipping Transfer) Tax Return
• When a taxpayer should elect out of the automatic GSTT allocations
• How to prepare election statements for inclusion ratios
• Making late GSTT exemption allocations
• Pre and post-mortem planning techniques for maximum advantage of the GSTT exemption

Learning Objectives

After completing this course, you will be able to:

• Identify automatic GSTT allocations
• Determine how to report transfers to trusts on Form 709
• Decide when a taxpayer should elect out of automatic GSTT allocations
• Ascertain when an inclusion ratio of one should be elected

• Field of Study: Taxes
• Level of Knowledge: Intermediate
• Advance Preparation: None
• Teaching Method: Seminar/Lecture
• Delivery Method: Group-Internet (via computer)
• Attendance Monitoring Method: Attendance is monitored electronically via a participant's PIN and through a series of attendance verification prompts displayed throughout the program
• Prerequisite: Three years+ business or public firm experience preparing complex tax forms and schedules, supervising other preparers or accountants. Specific knowledge and understanding of estate, gift and trust taxation including various trusts types, the unified credit, and portability.

Strafford Publications, Inc. is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of Accountancy have final authority on the acceptance of individual courses for CPE Credits. Complaints regarding registered sponsons may be submitted to NASBA through its website: www.nasbaregistry.org.

IRS Approved Provider

Strafford is an IRS-approved continuing education provider offering certified courses for Enrolled Agents (EA) and Tax Return Preparers (RTRP).