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Every one has it wrong. The Generation Skipping Trust, is literally what is sounds like. The money must skip one whole generation. They should name it the Grandparent to Grandchild tax exempt gift, so people don't get so confused. I don't know where it's at now, but this was a $2,000,000 a Grandparent limit, which kicked money outside the "Life Time Gift Exemption." The Government, rightfully believed that this was an excellent way to get cash into the economy, without looking hard on Death Tax. As my Tax Law teacher said, what's the first thing a youndg person with money do???? Red sports car! Not a big fan myself of red sports cars, but you get the idea. It skipped a Generation, the policy literally was/is wealth distribution and consumer upswing by "new money" young people. It may be State to State, but there was no age limit in CA, just had to not be a direct child, or first generation. Read the Treasury Code. Lawyers use the Treasry Code, and Accountants use the tax code. The Treasury Code is the Law, which dictates the Tax Code. The Countries Finances are actually based on law, the tax code comes second. I don't know the actual Treasury Code citation, but the Treasury Code has more authority that Tax or IRS Codes, which are derived from the Treasury Code. '''(I am not a licensed ttorney or accountant, this sharing of knowledge, no matter how true and correct), is in no way meant to be, not should it be used in place of the advice of a State Licensed Lawyer or even Accountant.'''
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{{UStaxation}}
The U.S. '''Generation-skipping transfer tax''' imposes a tax on both outright gifts and transfers in [[Trust law|trust]] to or for the benefit of unrelated persons who are more than 37.5 years younger than the donor or to related persons more than one generation younger than the donor, such as grandchildren.<ref>See IRS Form 709 Instructions</ref> The generation-skipping tax will be imposed only if the transfer avoids incurring a gift or estate tax at each generation level.
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