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Simple English definitions for legal terms

generation-skipping transfer

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A quick definition of generation-skipping transfer:

Generation-skipping transfer: When someone gives money or property to their grandchildren or other people who are much younger than them, it's called a generation-skipping transfer. This used to be a way for rich people to avoid paying taxes, but now there is a special tax for these kinds of gifts. If you give more than a certain amount of money to someone who is 37 ½ years younger than you, you have to pay a tax of 40%. However, some people can still avoid this tax by setting up special trusts called dynasty trusts.

A more thorough explanation:

A generation-skipping transfer is a type of gift made through a trust to family members or others who are a generation younger than the person creating the trust. This type of transfer was used in the past to avoid estate and gift taxes that would normally apply to large gifts or bequests. However, the generation-skipping transfer tax was created to close this loophole and tax these types of transfers similarly to other large gifts and bequests.

For example, if a wealthy grandparent wanted to leave a large sum of money to their grandchild, they could create a trust and make a generation-skipping transfer to avoid paying estate and gift taxes. However, with the generation-skipping transfer tax, this type of transfer would be taxed similarly to other large gifts and bequests.

The generation-skipping transfer tax applies to transfers above the applicable exclusion amount, which is currently $12,060,000 in 2022. Any amount gifted above this exclusion amount to individuals who are 37 ½ years younger than the creator of the trust will be taxed at a rate of 40%. However, individuals can still create dynasty trusts, which may avoid all gift taxes and the generation-skipping tax when transferred to younger generations.

general verdict | generation-skipping transfer tax

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MIAMI A
[] AromaticTroubledDormouse
20:55
How does one know if they are UR1 or UR2?
[] AromaticTroubledDormouse
20:56
CONGRATS MACAQUE!
TY
got a random stanford email and almost had a heart attack
ALSO CONGRATS!
Congrats1!
21:15
Miami A, yall I'm so excited I could cry.
21:15
Feel like I can finally stop holding my breath!! Whew!!!
[] baddestbunny
22:16
every time I get accosted by a strange man who follows me around because my male coworkers were too busy talking to walk me back to my car I get closer to saying we need to bring back traditional gender roles
Dkk
22:32
Nice! @Macaque
Dkk
22:32
@Aromatic, Have to guess.
Dkk
22:33
That sucks @Bunny do you have to go to the hospital?
[] baddestbunny
22:40
I said accosted not assaulted
23:35
guys. my notre dame address just went long is this good or bad
1a2b3c4d26z
23:37
Oooooo me too
23:37
omg is this good or bad
Dkk
23:47
Idk if gender roles are gunna fix that then.
23:49
it looks like most people who applied in october last cycle didn't get a decision until january... does it even mean anything that our addresses went long??
hows ED 2 compared to ED 1?
Dkk
0:10
No idea
windyMagician
0:34
reporting live to say my ndls address also went long
does it mean anything ^
Dkk
2:21
NDLS and Fordham took a very long time last year. It's good info for people to know.
[] baddestbunny
4:29
let’s get after it boys and girls
Dkk
5:21
I gtg to bed soon.
Dkk
5:22
Big day today. Gunna be a crazy one. I will sleep through the first half.
good morning lsd it is 5 am EST
also jazzy my ndls address went long ages ago i sadly do not think it means anything
my stanford address also went long LOL i think at most it's an indicator it's under review
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