§2651 Generation Assignment

Summary

Decides which generation a person is in for these tax rules. If someone is a direct descendant of a grandparent of the person making the transfer, you count how many generations down each is from that grandparent and use that comparison to pick the generation. The same rule applies if the descendant is of a grandparent of the transferor’s spouse. Adopted people count the same as blood relatives. Half-blood relatives count the same as whole-blood. Anyone who has ever been married to the transferor is placed in the transferor’s generation. Someone who married a person placed by the grandparent rule is put into that person’s generation. If no rule above applies, use birth years: born within 12½ years after the transferor = same generation; born more than 12½ but not more than 37½ years after = one generation younger; after that, each new generation is 25 years. For testing whether a transfer skips a generation, a special rule applies when a person is a descendant of a transferor’s (or transferor’s spouse’s) parent and that person’s own parent (who is also a descendant) is already dead when the transfer is taxed under chapter 11 or 12 (or, if there are multiple such times, the earliest). That special rule does not apply to a non-descendant if the transferor has any living descendant. If someone could be put in more than one generation, they are placed in the youngest one unless rules say otherwise. When an entity (like an estate, trust, partnership, or corporation) has an interest in property, people who benefit from that entity are treated as having the property and are assigned generations, except for certain organizations, certain charitable trusts, and government entities.