USC Subchapter B

in effect

26 U.S.C. § 2611 Generation-skipping transfer defined

(a) In generalFor purposes of this chapter, the term “generation-skipping transfer” means—(1) a taxable distribution, (2) a taxable termination, and (3) a direct skip. (b) Certain transfers excludedThe term “generation-skipping transfer” does not include—(1) any transfer which, if made inter vivos by an individual, would not be treated as a taxable gift by reason of section 2503(e) (relating to exclusion of certain transfers for educational or medical expenses), and (2) any transfer to the extent—(A) the property transferred was subject to a prior tax imposed under this chapter, (B) the transferee in the prior transfer was assigned to the same generation as (or a lower generation than) the generation assignment of the transferee in this transfer, and (C) such transfers do not have the effect of avoiding tax under this chapter with respect to any transfer.

26 U.S.C. § 2612 Taxable termination; taxable distribution; direct skip

(a) Taxable termination(1) General ruleFor purposes of this chapter, the term “taxable termination” means the termination (by death, lapse of time, release of power, or otherwise) of an interest in property held in a trust unless—(A) immediately after such termination, a non-skip person has an interest in such property, or (B) at no time after such termination may a distribution (including distributions on termination) be made from such trust to a skip person. (2) Certain partial terminations treated as taxableIf, upon the termination of an interest in property held in trust by reason of the death of a lineal descendant of the transferor, a specified portion of the trust’s assets are distributed to 1 or more skip persons (or 1 or more trusts for the exclusive benefit of such persons), such termination shall constitute a taxable termination with respect to such portion of the trust property. (b) Taxable distributionFor purposes of this chapter, the term “taxable distribution” means any distribution from a trust to a skip person (other than a taxable termination or a direct skip). (c) Direct skipFor purposes of this chapter—(1) In generalThe term “direct skip” means a transfer subject to a tax imposed by chapter 11 or 12 of an interest in property to a skip person. (2) Look-thru rules not to applySolely for purposes of determining whether any transfer to a trust is a direct skip, the rules of section 2651(f)(2) shall not apply.

26 U.S.C. § 2613 Skip person and non-skip person defined

(a) Skip personFor purposes of this chapter, the term “skip person” means—(1) a natural person assigned to a generation which is 2 or more generations below the generation assignment of the transferor, or (2) a trust—(A) if all interests in such trust are held by skip persons, or (B) if—(i) there is no person holding an interest in such trust, and (ii) at no time after such transfer may a distribution (including distributions on termination) be made from such trust to a nonskip person. (b) Non-skip personFor purposes of this chapter, the term “non-skip person” means any person who is not a skip person.