Federal estate, gift and GST tax
Federal estate, gift and GST tax covers the transfer tax system that applies when property passes by gift or at death. The topic explains the estate and gift tax, the annual exclusion, portability, generation-skipping transfer tax and common trust structures that interact with them.
What the topic covers
The guides describe how the federal estate and gift tax system works, how lifetime gifts and the annual exclusion work, and how portability applies to a surviving spouse. They cover generation-skipping transfer tax and the allocation of GST exemption to trusts, along with grantor retained annuity trusts and qualified personal residence trusts as arrangements the tax rules address. Current dollar amounts appear only in the calculators and in the collapsed Sources, because they change.
Questions owners ask
Common questions ask whether tuition and medical payments count against the gift tax exclusion, whether an estate can elect portability after the filing deadline, and whether lower asset values can be used after a market decline.
How the pieces connect
Gift tax and estate tax share one unified system, so a lifetime gift and a transfer at death draw on the same exemption. Portability carries a deceased spouse's unused amount to the survivor, and generation-skipping tax adds a separate layer for transfers to grandchildren and later generations. The infographic and calculators for this topic show the flow of the calculation.
Who meets this topic
Owners of businesses, real estate and private investments meet transfer tax when the value of what they hold approaches the federal exemption. Spouses and adult children meet it through gifts, portability and trusts that skip a generation.
- How generation skipping transfer tax works
Learn how GST tax applies to transfers, trust distributions and terminations, how exemption allocation affects the rate, and who is responsible for payment.
- How gift tax returns document transfers and valuations
Learn what gift tax returns disclose, how valuation support affects the assessment period, and which transfer records to keep for a complete Form 709 file.
- How grantor retained annuity trusts work
Learn how GRAT annuity payments, gift valuation, estate inclusion and GST allocation timing fit together, with reporting requirements and questions to review.
- How GST exemption is allocated to trusts
Learn how GST exemption allocation works for trusts, how timely and late filings affect valuation, and when an estate tax inclusion period delays its effect.
- How lifetime gifts and the annual exclusion work
Understand annual gift exclusions, present interests, trust withdrawal rights and gift tax reporting before planning transfers to family members or recipients.
- How qualified personal residence trusts work
Learn how qualified personal residence trusts reserve home use, with guidance on gift valuation, estate inclusion, mortgage administration and reporting duties.
- How the federal estate and gift tax system works
Learn how federal estate and gift taxes connect, how exclusions differ from the GST exemption, and which records and deadlines matter for return planning.
- How the marital deduction and QTIP elections work
Learn how QTIP qualification, election timing and reverse QTIP treatment connect the marital deduction, a spouse's estate and GST exemption allocation choices.
- Can an estate elect portability after the filing deadline?
Missed the portability deadline? Review eligibility for simplified relief, the fifth anniversary filing window, Form 706 requirements and possible next steps.
- Can an estate use lower asset values after a market decline?
Learn when an estate can elect lower asset values after a market decline, which valuation dates apply, and how filing deadlines and inherited basis interact.
- Do tuition and medical payments count against the gift tax exclusion?
Learn when direct tuition and medical payments avoid using the annual gift tax exclusion, which expenses fall outside it, and how gift tax reporting works.
- Does adding a joint owner create a taxable gift?
See when adding a joint owner creates a gift, how bank withdrawals differ from property transfers, and what to review for gift tax reporting and spousal gifts.
- Is a grandchild a skip person if the grandchild's parent has died?
Learn when a deceased parent changes a grandchild’s GST generation assignment, how the 90 day rule works, and what to review for trusts and later descendants.
- When is declining an inheritance not treated as a gift?
Learn when declining an inheritance is not a gift, how nine month disclaimer deadlines work, and what to review about gift completion, credits and reporting.
- Annual gift tax exclusion
Understand the annual gift tax exclusion, present interests, gifts in trust and Form 709, with questions for gifts of cash, business interests and property.
- Crummey withdrawal power
Learn how Crummey withdrawal powers relate to trust gifts, enforceable present interests, annual gift tax exclusions, power lapses and separate GST concerns.
- Deceased spousal unused exclusion (DSUE)
Understand deceased spousal unused exclusion (DSUE): its calculation, portability election, filing timetable, gift order and rules for a surviving spouse.
- Fair market value
Understand fair market value for estate and gift taxes, including valuation dates, business interests, real estate, reporting records and common pricing errors.
- Gross estate
Understand what a gross estate includes, how property is valued, and why mortgages, joint ownership and life insurance deserve a closer look in your review.
- GST inclusion ratio
Learn what the GST inclusion ratio measures, how exemption allocation and trust timing affect it, and which records help trustees review GST tax questions.
- Marital deduction
Learn how the marital deduction works for property passing to a spouse, including trust exceptions, citizenship requirements, valuation and estate reporting.
- QTIP (qualified terminable interest property)
Learn what QTIP means, the qualifying income interest for a spouse, estate and gift tax elections, partial elections, and reverse QTIP reporting requirements.
