I.R.C. § 2653(a) General Rule
For purposes of this chapter, if—
for purposes of applying this chapter
(other than section 2651)
to subsequent transfers from the portion of such trust attributable to such property,
the trust will be treated as if the transferor of such property were assigned to
the first generation above the highest generation of any person who has an interest
in such trust immediately after the transfer.
I.R.C. § 2653(b) Trust Retains Inclusion Ratio
I.R.C. § 2653(b)(1) In General
Except as provided in paragraph (2), the provisions of subsection (a) shall not affect the inclusion ratio determined with respect to any trust. Under
regulations prescribed by the Secretary, notwithstanding the preceding sentence,
proper adjustment shall be made to the inclusion ratio with respect to such trust
to take into account any tax under this chapter borne by such trust which is imposed
by this chapter on the transfer described in subsection (a).
I.R.C. § 2653(b)(2) Special Rule For Pour-Over Trust
I.R.C. § 2653(b)(2)(A) In General
If the generation-skipping transfer referred to in subsection (a) involves
the transfer of property from 1 trust to another trust (hereinafter in this paragraph
referred to as the “pour-over trust”), the inclusion ratio for the pour-over trust
shall be determined by treating the nontax portion of such distribution as if it
were a part of a GST exemption allocated to such trust.
I.R.C. § 2653(b)(2)(B) Nontax Portion
For purposes of subparagraph (A), the nontax portion of any distribution is the amount of such distribution multiplied
by the applicable fraction which applies to such distribution.
(Added by Pub. L. 99-514, title XIV, 1431(a), Oct. 22, 1986, 100 Stat. 2727.)
Section applicable to generation-skipping transfers
(within the meaning of section 2611 of this title) made after Oct. 22, 1986, except
as otherwise provided, see section 1433 of Pub. L. 99-514, set out as a note under section 2601 of this title.
REINSTATEMENT OF ESTATE TAX; REPEAL OF CARRYOVER BASIS
Section 301 of Pub. L. 111-312 provided:
IN GENERAL.—Each provision of law amended by subtitle A or E of title V of the Economic
Growth and Tax Relief Reconciliation Act of 2001 is amended to read as such provision
would read if such subtitle had never been enacted.
CONFORMING AMENDMENT.—On and after January 1, 2011, paragraph
(1) of section 2505(a) of the Internal Revenue Code of 1986 is amended to read as such paragraph would read if section 521(b)(2) of the
Economic Growth and Tax Relief Reconciliation Act of 2001 had never been enacted.
SPECIAL ELECTION WITH RESPECT TO ESTATES OF DECEDENTS DYING IN 2010.—Notwithstanding
subsection (a), in the case of an estate of a decedent dying after December 31, 2009,
and before January 1, 2011, the executor (within the meaning of section 2203 of the Internal Revenue Code of 1986) may elect to apply such Code as though the amendments made by subsection
(a) do not apply with respect to chapter 11 of such Code and with respect to property
acquired or passing from such decedent (within the meaning of section 1014(b) of such
Code). Such election shall be made at such time and in such manner as the Secretary
of the Treasury or the Secretary's delegate shall provide. Such an election once made
shall be revocable only with the consent of the Secretary of the Treasury or the Secretary's
delegate. For purposes of section 2652(a)(1) of such Code, the determination of whether
any property is subject to the tax imposed by such chapter 11 shall be made without
regard to any election made under this subsection.
EXTENSION OF TIME FOR PERFORMING CERTAIN ACTS.—
(1) ESTATE TAX.—In the case of the estate of a decedent dying after December 31, 2009,
and before the date of the enactment of this Act, the due date for—
filing any return under section 6018 of the Internal Revenue Codeof 1986 (including any election required to be made on such a return) as such section
is in effect after the date of the enactment of this Act without regard to any election
under subsection (c),
making any payment of tax under chapter 11 of such Code, and
making any disclaimer described in section 2518(b) of such Code of an interest in
property passing by reason of the death of such decedent, shall not be earlier than
the date which is 9 months after the date of the enactment of this Act.
GENERATION-SKIPPING TAX.—In the case of any generation-skipping transfer made after
December 31, 2009, and before the date of the enactment of this Act, the due date
for filing any return under section 2662 of the Internal Revenue Code of 1986 (including any election required to be made on such a return)
shall not be earlier than the date which is 9 months after the date of the enactment
of this Act.
EFFECTIVE DATE.—Except as otherwise provided in this section, the amendments made
by this section shall apply to estates of decedents dying, and transfers made, after
December 31, 2009.”
Section 501(b) (Generation-Skipping Transfer Tax Repeal) of Pub. L. 107-16 added Code Sec. 2664, which states that chapter 13 of subtitle B shall not apply
to generation-skipping transfers after December 31, 2009.
Note, however, that Section 901 (Sunset of Provisions of Act) of Pub. L. 107-16, as amended by Pub. L. 107-358 and Pub. L. 111-312, and struck by Pub. L. 112-240, Sec. 101(a)(1) (effective for taxable, plan, or limitation years beginning after Dec. 31, 2012,
and estates of decedents dying, gifts made, or generation skipping transfers after
Dec. 31, 2012), provided that:
IN GENERAL.--All provisions of, and amendments made by, this Act shall not apply--
“(1) to taxable, plan, or limitation years beginning after December 31, 2012, or
“(2) in the case of title V, to estates of decedents dying, gifts made, or generation
skipping transfers, after December 31, 2012.
APPLICATION OF CERTAIN LAWS.--The Internal Revenue Code of 1986 and the Employee Retirement
Income Security Act of 1974 shall be applied and administered to years, estates, gifts,
and transfers described in subsection (a) as if the provisions and amendments described
in subsection (a) had never been enacted.
EXCEPTION.-Subsection (a) shall not apply to section 803 (relating to no federal income
tax on restitution received by victims of the Nazi regime or their heirs or estates).”