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Generation-Skipping Transfer Tax Reporting and Planning

Automatic Allocations, Opting-Out, Election Statements, Planning Techniques

Note: CLE credit is not offered on this program

Recording of a 110-minute CPE webinar with Q&A

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Conducted on Friday, June 14, 2024

Recorded event now available

or call 1-800-926-7926

This webinar will provide hands-on examples of reporting the generating-skipping transfer tax (GSTT) on IRS Forms 706 and 709 for transfers to skip persons and indirect skip persons, such as trusts. Our trust and estate expert will guide trust and estate professionals through automatic allocations, electing inclusion ratios, and specific techniques to minimize overall transfer taxes paid.

Description

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.

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Outline

  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

Benefits

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

Faculty

Ploss, I. Richard
I. Richard Ploss
Counsel
Porzio, Bromberg & Newman

Mr. Ploss is a member of the firm's Trusts and Estates Department. He concentrates his practice primarily on...  |  Read More

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