On May 7, 2024, Bloomberg Tax quoted Emily Plocki on generation-skipping transfer (GST) tax rules. The IRS has released final rules detailing when taxpayers can get more time to use the generation-skipping transfer tax exemption.
The rules released last week come amid increased interest in estate and gift tax policy ahead of the 2025 tax battle. According to the article, a 40% GST tax applies generally when taxpayers transfer wealth to grandchildren if the amount given totals more than $13.6 million, the 2024 exemption amount. Taxpayers can elect which gifts qualify for that exemption. These rules govern when they can change certain GST elections retroactively, known as granting relief.
Bloomberg Tax reports that the GST exemption, and the separate gift and estate exemption, will be significantly reduced at the end of next year if Congress doesn’t extend the exemption amount from the 2017 tax law.
Commenting on the changes, Plocki said that the final regulations will likely be more affordable to taxpayers and ease the burden on the government.
The finalized rules provide a more consistent standard for granting extensions. “It’s cheaper for taxpayers, and the government is not getting bogged down with these constant requests for relief for something that is a pretty standardized issuance they could do,” Plocki said.
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