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In 2009, each taxpayer enjoyed a $3,500,000 exemption from the generation-skipping tax. That meant that only aggregate gifts and bequests to grandchildren or younger beneficiaries in excess of $3,500,000 (potentially $7,000,000 for a married couple acting in concert) would be subject to the generation-skipping transfer tax.
In 2010, like the Federal Estate Tax, the generation-skipping transfer tax was repealed. In some ways, it could be viewed that the exemption is essentially unlimited in 2010 for transfers that would otherwise be subject to the tax. However, the law that created the increases and ultimate repeal of the GST Tax Exemption expired on December 31, 2010.<ref>The Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010, Pub. L. No. 111-312 § 101 (codified as amended in scattered sections of 26 U.S.C.) (extending the sunset provision in Pub. L. No. 107-16 from Dec. 31, 2010 to Dec. 31, 2012).</ref> Now, the exemption is 5.
For generation-skipping trusts created in the years of 2011 and 2012 and for outright gifts to skip-persons, taxpayers are entitled to a $5 million GST tax exemption.
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