GST: Predeceased Parent Rule and Deemed Allocation Prop. Regs.The AICPA's Trust, Estate and Gift Tax Technical Resource Panel submitted comments to the IRS An abbreviation for the Internal Revenue Service, a federal agency charged with the responsibility of administering and enforcing internal revenue laws. on the proposed regulations on the predeceased parent rule. That rule provides an exception to the generation-skipping transfer (GST GST abbr. Greenwich sidereal time GST (in Australia, New Zealand, and Canada) Goods and Services Tax ) tax generation assignment rules that assign a higher generation to transferees when the transferee's parent is deceased deceased 1) adj. dead. 2) n. the person who has died, as used in the handling of his/her estate, probate of will and other proceedings after death, or in reference to the victim of a homicide (as: "The deceased had been shot three times. . The comments state that (1) Prop. Kegs. Sec. 26.2651-1 (b) exceeds statutory authority; (2) Example 6 in Prop. Regs. Sec. 26.26511 (c) should be clarified; and (3) the final version of Prop. Kegs. Sec. 26.2651-203) should clarify that the definition of "legal adoption" therein applies only to Sec. 2651(f)(1). Deemed allocations: Sec. 2632(c) proposed regulations offer guidance on electing out of GST deemed allocations. The proposed regulations provide guidance for electing under Sec. 2632(c)(5)(A)(i) not to have the deemed allocation of unused GST exemption under Sec. 2632(c)(1) apply to certain transfers to a GST trust. The proposed rules also provide guidance for electing under Sec. 2632(c)(5)(A)(ii) to treat a trust as a GST trust. The AICPA AICPA See American Institute of Certified Public Accountants (AICPA). recommends removing the language "(including an automatic allocation to a direct skip, but not an indirect skip)" from the final version of Regs. Sec. 26.2632-1 (c)(1), to eliminate any confusion about the deemed allocation of a GST exemption to direct and indirect skips. The AICPA also suggests expanding the last sentence of Prop. Kegs. Sec. 26.2632-1(b)(2)(i), to clarify its application; it recommends the following language: The transferor may prevent the automatic allocation of GST exemption with regard to an indirect skip (including indirect skips to which section 2642(f) may apply), as provided in paragraphs (b)(2)(ii) and (iii) of this section. Finally, it suggests including examples in the final regulations that show how the deemed allocation rules for indirect skips apply when trusts subject to an estate tax inclusion period (ETIP ETIP Estate Tax Inclusion Period ETIP Energy Technology Innovation Policy (JFK School of Government, Harvard University) ) terminate on the expiration EXPIRATION. Cessation; end. As, the expiration of, a lease, of a contract, or statute. 2. In general, the expiration of a contract puts an end to all the engagements of the parties, except to those which arise from the non- fulfillment of obligations created of an ETIP and distribute assets to other trusts that may be GST trusts. The full text of both AICPA comment letters is available at www.cpa2biz biz n. Informal Business. biz Noun Informal business Noun 1. .com/ ResourceCenters/Tax/Estate%2c+Gift%2 c+Trust%2c+ Fiduciary/default.htm. |
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