Generation-Skipping Transfer Tax (GSTT) is a tax levied against transfers of property made to a beneficiary two or more generations below the donor\u2019s generation (e.g., from a grandparent to a grandchild). The tax is imposed to ensure that wealth is not passed down without taxation. GSTT applies to any gifts or transfers of property made in trust or through a will, such as real estate, stocks, bonds, and other investments. It also applies to gifts of cash.<\/p>\n
GSTT is calculated as an additional flat tax rate on top of the estate tax or the gift tax. The flat tax rate is set at 40% of the value of the property or gift being transferred. So, in the example of a grandparent transferring property worth $800,000 to a grandchild, the GSTT imposed would be an additional $320,000. This amount would be paid in addition to any estate or gift taxes that must already be paid by the grandparent.<\/p>\n
The federal government does provide some exceptions in which no GSTT will be levied. These exceptions include transfers between spouses, transfers to qualified charitable organizations, and transfers for medical or educational expenses in certain instances. It is important to understand how GSTT will apply in your situation before making a transfer, to ensure that you minimize the tax burden as much as possible.<\/p>\n
Understanding the implications of GSTT is essential for anyone making a transfer of property for which GSTT would be applied. Consult with an estate lawyer to ensure that the transfer is made in accordance with applicable laws. You may also wish to speak to a financial planner to ensure that you receive the most benefit from your transfer.<\/p>\n","protected":false},"excerpt":{"rendered":"
Generation-Skipping Transfer Tax (GSTT) is a tax levied against transfers of property made to a beneficiary two or more generations below the donor\u2019s generation (e.g., from a grandparent to a grandchild). The tax is imposed to ensure that wealth is not passed down without taxation. GSTT applies to any gifts or transfers of property made […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-1233","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"aioseo_notices":[],"aioseo_head":"\n\t\t\n\t\n\t\n\t\n\t\n\t\n\n\t\t\n