§2653 Taxation of Multiple Skips

Summary

Special rules apply when property goes through a generation-skipping transfer and stays in trust afterward, so the tax can apply again to later skips. The trust's inclusion ratio (the fraction of the trust exposed to the tax) generally stays the same, but regulations require an adjustment to account for any generation-skipping tax the trust itself paid on the transfer. When the skip moves property from one trust into another (a pour-over trust), the receiving trust's inclusion ratio is figured by treating the untaxed part of the distribution as if it were GST exemption allocated to that trust.