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Estate, Gift & Inheritance Tax

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Together, the estate, gift, and generation-skipping transfer (GST) taxes cover transfers of property made during a transferor’s life as gifts, at the transferor’s death as part of an estate, and transfers that skip a generation. Tax treatment of such transfers is covered by a unified transfer tax.

Upon an individual’s death, an amount of transfers is excludable from estate, gift, and GST taxes; this amount is adjusted annually for inflation (Rev. Proc. 2013-35, Rev. Proc. 2014-61). If an individual does not use the entire excluded amount, a surviving spouse may be able to add that amount to his or her exclusion amount. Changes in the treatment of same-sex marriages have therefore affected estate, gift, and GST taxation as well (United States v. Windsor, Rev. Rul. 2013-17).

When a taxpayer transfers property by means of gift, that taxpayer may be subject to federal gift taxes. The gift tax is addressed in the Internal Revenue Code at sections 2501 through 2524 and in the associated regulations. The donor is responsible for payment of this tax.

The GST tax, described at 26 U.S.C. 2611, was created to tax transfers of property at each generation, thereby preventing tax benefits to generation-skipping transfers (GST), which shift property by gift or death to a person or persons two or more generations below the transferor.

Tax Analysts has many subject matter experts who can discuss all relevant developments regarding taxation of estates, gifts, and inheritances. To schedule an interview or a background session, please contact communications@taxanalysts.org or call 1-800-955-2444.