The AICPA recently sent a letter to the IRS that recommends two changes to final regulations regarding the generation-skipping transfer (GST) exemption and certain elections to make it easier and less expensive for taxpayers to leave assets to younger generations.
The Sec. 2642(g) final regulations, which provide relief provisions respecting timely allocation of the GST exemption and certain GST elections, are included in T.D. 9996, Relief Provisions Respecting Timely Allocation of GST Exemption and Certain GST Elections.
Even though the regulations are meant as “a safety net for missed GST elections,” the IRS can still improve them because their “high cost and complexity make the private letter ruling approach impractical for many taxpayers,” the AICPA said in a news release.
The GST, which is not the same as the estate tax, applies when a taxpayer transfers assets to people in generations two or more below them, such as grandchildren or great-grandchildren, thus “skipping” their children. See the AICPA’s recommendations.