§2603 — Title 26 Internal Revenue Code | U.S. Code

Summary

If a generation-skipping transfer is a taxable distribution, the person who gets the property must pay the tax. If it is a taxable termination or a direct skip from a trust, the trustee must pay. If it is a direct skip that is not from a trust, the person who gave the property must pay. The tax is charged against the property that was transferred unless the controlling document (like a trust or will) says in plain terms that someone else must pay. Rules from the estate and gift tax law about who is liable, liens, and related matters also apply.

Title 26, §2603

Internal Revenue Code — Source: USLM XML via OLRC

(a)(1)In the case of a taxable distribution, the tax imposed by section 2601 shall be paid by the transferee.

(2)In the case of a taxable termination or a direct skip from a trust, the tax shall be paid by the trustee.

(3)In the case of a direct skip (other than a direct skip from a trust), the tax shall be paid by the transferor.

(b)Unless otherwise directed pursuant to the governing instrument by specific reference to the tax imposed by this chapter, the tax imposed by this chapter on a generation-skipping transfer shall be charged to the property constituting such transfer.

(c)For provisions making estate and gift tax provisions with respect to transferee liability, liens, and related matters applicable to the tax imposed by section 2601, see section 2661.

Notes & Related Subsidiaries

Editorial Notes

Amendments

1986—Pub. L. 99–514 amended section generally, substituting tax liability provisions consisting of language placing liability, under different circumstances, on the transferee, the trustee, or the transferor, the source of the tax, and a cross reference to section 2661 for former provisions which covered the question of liability for tax with language covering the trustee and the distributee, the limitation on personal liability of the trustee who relied on certain information furnished by the Secretary, the limitation on personal liability of distributee, and the lien on property transferred until the tax was paid in full or became unenforceable by reason of lapse of time.

Statutory Notes and Related Subsidiaries

Effective Date

of 1986 Amendment Section applicable to generation-skipping transfers (within the meaning of section 2611 of this title) made after Oct. 22, 1986, except as otherwise provided, see section 1433 of Pub. L. 99–514, set out as a note under section 2601 of this title.

§2603 Liability for tax