A generation-skipping transfer tax is a tax imposed when property exceeding $1 million is transferred to a person who is one generation below the donor or decedent.

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The generation-skipping transfer tax (GSTT) is imposed on transfers, either during life or at death, to individuals who are two or more generations below the donor, not one. The threshold for the tax is also adjusted for inflation and has been significantly higher than $1 million in recent years.

A Generation-Skipping Transfer Tax Is a Tax Imposed When Property