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IRS eases rules applicable to NRAs in final GST tax regs

Article Abstract:

The IRS's final generation-skipping transfer (GST) tax regulations, issued Dec. 26, 1995, are more favorable to non-resident alien taxpayers than the original proposed regulations. The final regulations allow non-resident aliens to use traditional estate and gift tax planning techniques, thus simplifying GST tax planning. Previously, non-resident aliens had to be concerned about GST tax liability due to transfers of non-US situs property if parents or skip persons were US residents. The final regs limit the GST tax only to transfers carrying estate or gift liabilities.

United States, Taxation

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Prop. regs. provide guidance on GST tax planning for NRAs

Article Abstract:

Proposed regulations under IRC 2663 which governs the generation-skipping transfer (GST) tax were published on Dec 24, 1992 and provide some clarifications on applying this tax to nonresident aliens' estates. Two provisions regulate the interests of nonresident aliens, the first imposes GST tax on transferred property sited in the US, the second examines the citizenship of the skipped person to determine tax liability. Parts of both rules are likely to create some problems, and proper planning for this tax should be encouraged prior to immigration if possible.

Methods, Tax planning

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Many aspects of the GST tax interpreted by prop. regs

Article Abstract:

Proposed regulations on the generation-skipping transfer (GST) tax published on Dec 24, 1992 improve comprehension of issues under IRC 2663 relating to GST taxes. These issues include how the allocation of the $1 million GST exemption should be timed, the estate tax inclusion period, a trust's inclusion ratio, trust shares and the use of constructive additions. Suggestions for creating documents appropriate to the proposed regulations are presented.

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