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GiftLaw Pro Home   >  Chapter 1 - Taxation and Giving  >  1.4 Generation-Skipping Tax Deductions  >  1.4.1 Generation-Skipping Transfer Tax Overview  >  Basic Quiz

Basic Quiz - 1.4.1 Generation-Skipping Transfer Tax Overview

1. In general, the Tax Code imposes a potential tax on large generation-skipping transfers.
           
2. The term generation-skipping transfer includes a taxable distribution, a taxable termination or a direct skip.
           
3. A taxable distribution occurs when there is a distribution from a trust to a skip person.
           
4. In the case of a taxable distribution from a charitable remainder unitrust, the GSTT due shall be paid by the transferee.
           
5. A taxable termination occurs when a trust loses its tax-exempt status.
           
6. In the case of a taxable termination, the trustee must pay the GSTT due.
           
7. A direct skip is an outright transfer from a transferor to a skip person.
           
8. In the case of an outright direct skip gift, the transferor pays the GSTT due.
           
9. A skip person is someone who is still a minor, which in many states is 17 and under.
           
10. If a charitable remainder unitrust is set up for the grandchildren of the transferor, the income distributions would constitute taxable distributions.