Editing Generation-skipping transfer tax
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The first version of the generation-skipping transfer tax was introduced in 1976.<ref>The Tax Reform Act of 1976, Pub. L. No. 94-455, § 2006, 90 Stat. 1520, 1879−90.</ref> That version attempted to impose a generation-skipping tax exactly equal to the estate or gift tax that was avoided. In the above example, the Executor of the child's Will would have had to determine the estate tax, if any, the child's estate owed without regard to the existence of the trust. Then the Trustee of trust would have to use the child's Federal Estate Tax Return as the basis for recomputing the child's estate tax liability as if the trust property had been part of the child's estate. |
The first version of the generation-skipping transfer tax was introduced in 1976.<ref>The Tax Reform Act of 1976, Pub. L. No. 94-455, § 2006, 90 Stat. 1520, 1879−90.</ref> That version attempted to impose a generation-skipping tax exactly equal to the estate or gift tax that was avoided. In the above example, the Executor of the child's Will would have had to determine the estate tax, if any, the child's estate owed without regard to the existence of the trust. Then the Trustee of trust would have to use the child's Federal Estate Tax Return as the basis for recomputing the child's estate tax liability as if the trust property had been part of the child's estate. |
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== The version of the tax starting in 1986 == |
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That approach posed so many administrative problems that in 1986 [[United States Congress|Congress]] repealed the 1976 version and enacted a new generation-skipping transfer tax law.<ref>Tax Rm Act of 1986, Pub. L. No. 99-514, §§ 1431−33, 100 Stat. 2085, |
That approach posed so many administrative problems that in 1986 [[United States Congress|Congress]] repealed the 1976 version and enacted a new generation-skipping transfer tax law.<ref>Tax Rm Act of 1986, Pub. L. No. 99-514, §§ 1431−33, 100 Stat. 2085, |