Generation Skipping Tax: Should It Stay or Should It Go?
The Generation Skipping Transfer Tax is one of the more complicated (some might say draconian) features of the estate-planning world. Not surprisingly, cries to amend it are perennial. And now, it looks like there may be some movement.
An article in Bloomberg BNA’s, July 3, 2017 Tax Management Weekly Report does a good job of addressing the various arguments for and against the GST changes proposed in the recent House plan. See Bloomberg BNA’s July 3, 2017 Tax Management Weekly Report for Elizabeth Carrott Minnigh’s “The Case for Repeal (or Reform) of the Generation-Skipping Transfer Tax.” The House plan provides that the GST tax will be repealed along with the estate tax, but fails to provide details on how existing GST exempt and non-GST exempt trusts will be taxed post-repeal. Proponents like Minnigh argue that the repeal would aid in the goal of simplification, eliminating 30 pages from the Code and 52 pages from Treasury regulations. Further, IRS resources are inadequate to handle the multitude of requests for private letter rulings on GST tax issues, with the IRS having temporarily suspended the issuance of private letter rulings on certain GST tax questions. And, the added complexity of the GST tax doesn’t bring in a whole lot of revenue for the IRS. This is an area practitioners should keep an eye on.
Post by: Jillian Mastroianni
Jillian provides trust, estate, and tax-planning services. To subscribe to legal news updates from Jillian, click here.