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Estate, Gift and Generation-Skipping
Transfer Taxes Overview
TAX 6405
Class Schedule
Unified Credit Transfer Tax Overview
Overview of Estate Tax
Overview of Gift Tax
Overview of Generation Skipping Transfer Tax (“GSTT”)
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Estate and Gift Taxation in General
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Overview of Transfer Taxes
All
gratuitous transfers
are (currently) subject to a unified transfer
tax
(since 1976) including:
the estate tax (has been in existence since 1916)
the gift tax (has been in existence since 1932)
the generation-skipping transfer tax (GSTT) (has been in existence
since 1976)
Note: Transfer taxes have a limited impact – have produced about
1% of total revenue & affected around 1% of individuals.
Gift tax
tax on inter vivos (lifetime) transfers for less than full and adequate
consideration
payable by the donor
Estate tax
tax on testamentary (at death) transfers
imposed on decedent’s estate determined under tax rules (this is NOT
synonymous with the probate estate).
tax on the right to pass property at death (this is a TRANSACTION tax,
not a property tax)
essentially, the individual’s final taxable gift
Generation Skipping Transfer Tax
:
Included in both Gift and
Estate Tax.
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Overview of Transfer Taxes, cont’d
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Gift Taxes
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Gift Taxes Formula
Formula For Gift & Estate Taxes:
The 2009 Gift Tax Credit is $345,800 ($1 million of taxable gifts)
The 2009 Estate Tax Credit is $1,455,800 ($3.5 million taxable estate)
Gift tax
Estate tax
Total gifts to which the gift tax might apply (at fair value)
– Education and medical exclusion
– Political Gifts
– Charitable deduction
– Marital deduction
– Annual exclusion(s) ($12,000 per donee)
= Taxable gifts for the current period
+ All taxable gifts made in prior periods
= Total taxable gifts to date
