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Simple English definitions for legal terms

generation-skipping transfer tax

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A quick definition of generation-skipping transfer tax:

Generation-skipping transfer tax: A tax that applies to gifts made through trusts to family members and others who are a generation younger than the person creating the trust. This tax was created in 1976 to prevent wealthy individuals from avoiding estate and gift taxes by giving large gifts or bequests to their grandchildren and other younger individuals. The tax applies to transfers above a certain amount and is currently set at 40% for amounts above $12,060,000 gifted to individuals 37 ½ years younger than the creator of the trust. However, some individuals may still be able to avoid this tax by creating dynasty trusts.

A more thorough explanation:

The generation-skipping transfer tax is a tax that was created in 1976 to prevent wealthy individuals from avoiding estate and gift taxes by making gifts or bequests to their grandchildren and other younger individuals. This tax applies to gifts made through trusts to family members and others who are a generation younger than the creator of the trust.

For example, if a grandparent creates a trust for their grandchild and the grandchild is 20 years old, the generation-skipping transfer tax would apply because the grandchild is a generation younger than the grandparent.

The generation-skipping transfer tax is designed to tax these kinds of transfers similarly to other large gifts and bequests. Any generation-skipping transfers above the applicable exclusion amount are taxed at the highest rate that applies to other transfers. In 2022, a 40% generation-skipping transfer tax applies to amounts above $12,060,000 gifted to individuals 37 ½ years younger than the creator of the trust.

However, individuals can still create dynasty trusts which may avoid all gift taxes and the generation-skipping tax when transferred to younger generations.

Overall, the generation-skipping transfer tax is a way to prevent wealthy individuals from avoiding taxes by making gifts or bequests to younger generations.

generation-skipping transfer | generation-skipping trust

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@SplitterusClitterus: me yesterday
gulc baby pls text me back... i miss you ...... :(
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i just went into a discord vc and yelled "YALL I JUST GOT INTO J.M. SCHOOL OF LAW"
22:24
people were getting excited :sob:
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then someone was like "what does jm stand for" and i was like .. well
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@JumpySubsequentDolphin: wait this is so cute, also where r u going
JOE MBIDEN
JumpySubsequentDolphin
22:39
@splitty Oregon!
oh yay for what thats so random
JumpySubsequentDolphin
22:45
haha my brother and sister in law live there
so cutie oregon is beatiful
soyalmondoatmilk
8:38
good morning! hoping waves will come our wave today
8:42
GW wave today?
8:57
There’s someone I found on here with the username threeoutchange and if my understanding is correct that’s a reference to the debut album by a pretty cool 90s-00s Japanese band called Supercar. I geeked a little
8:57
It could just be a baseball reference I don’t get though lol
Dkk
9:00
@renard99: also, the same band that does a song in the anime Eureka 7 which I watched when I was like idk, 12
9:00
Yeah! They are pretty good. Three Out Change is an awesome J-rock record
Dkk
9:01
I will probably not listen to them more but fun fact. Really random to start the day. An omen that the waves will be very random today.
Dkk
9:03
Fuck, reading the wikipedia now. Literal last song they did before they broke up was Storywriter. Wow.
9:05
That one is a masterpiece
9:05
My favorite song by them is Recreation
glovediedthisishismom
9:05
snowing
Dkk
9:07
@renard99: man, hard to find.
Dkk
9:07
@glovediedthisishismom: Congrats on the snow.
Dkk
9:16
@renard99: Poetic and nice.
9:42
My name is renard99 and I just sent @babycat feet pics
glovediedthisishismom
9:42
nobody is at the office today they should let little glovey go home and watch harry potter
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