§2651 Generation Assignment

Summary

Decides which generation a person is in for the tax rules about generation-skipping transfers. Lineal descendants are placed by comparing how many generations they are away from a common grandparent with how many generations the transferor is away. The same comparison is used for descendants on a spouse’s side. Legal adoptions count like blood relations, and half-blood relatives count the same as whole-blood. Someone who married the transferor is placed in the transferor’s generation. Someone who married a lineal descendant is placed in that descendant’s generation. People who are not placed by those rules are sorted by birth date: anyone born no more than 12½ years after the transferor is in the transferor’s generation; born more than 12½ but no more than 37½ years after is one generation younger; and each additional generation starts every 25 years. If a person’s parent who links them to the transferor (or the transferor’s spouse) is dead when the transfer is taxed, that person is treated as one generation lower based on the lower of the transferor’s generation or the youngest living ancestor’s assignment, and their descendants are moved down too. That special rule doesn’t apply to non-lineal recipients when the transferor has any living lineal descendants. If someone could be placed in more than one generation, they go into the youngest one. Beneficiaries of estates, trusts, partnerships, or corporations are treated as owning the interest and are assigned a generation, except certain charities and government entities are put in the transferor’s generation.