GST Exemption

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GST (Generation-Skipping Transfer) Exemption for Gift and Estate Tax

The generation-skipping transfer (GST) lifetime exemption has increased to $1,500,000 for 2004. You can only allocate the $380,000 increase to transfers made during or after calendar year 2004. According to the IRS Form 709 instructions on page 11, 2nd column: "Enter on line 1 of Part 2 the maximum GST exemption you are allowed. This will not necessarily be the highest indexed amount if you have made no GST transfer during the year of the increase. For example, if your last GST transfer was in 2000, your maximum GST exemption would be $1,030,000, not $1,100,000." So, if the current Form 709 or the 2003, 2002, 2001, 2000 or 1999 Form 709 does not contain a GST transfer, the exemption does not increase for the current year and will remain at the 1998 rate of $1,000,000 on Form 709 Schedule C, Part 2, Line 1.

The GST exemption amounts for 1998 - 2011 are as follows:

Year Amount

1998 $1,000,000

1999 1,010,000

2000 1,030,000

2001 1,060,000

2002 1,100,000

2003 1,120,000

2004 1,500,000

2005 1,500,000

2006 2,000,000

2007 2,000,000

2008 2,000,000

2009 3,500,000

2010 repealed

2011 1,100,000

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