What Is the Generation-Skipping Transfer Tax?

You pay taxes that come from every direction throughout your life, so you may naturally assume that you can transfer assets to other people free of further taxation. This make sense to a lot of people, but whether we like it or not, there are asset transfer taxes in the United States. One of them is the generation-skipping transfer tax. The generation-skipping transfer tax is potentially applicable on large asset transfers to people who are not relatives who are at least 37.5 years younger than you are. This tax can also be levied on transfers to family members who are more than one generation younger than you. Other Transfer Taxes We used the term large asset transfers in the previous section because the generation-skipping transfer tax is one of three taxes that can come into play when you are transferring assets. There is a unified exclusion that you can use to transfer assets to others tax-free before any of these taxes would kick in. The other two taxes are the federal estate tax


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