During the current year, taxpayer U gives a gift of $300,000 cash to her grandson L.This is the first substantial gift she has given any grandchild.Because the gift is a generation-skipping transfer, U must pay a generation-skipping transfer tax.

Question

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The generation-skipping transfer (GST) tax exemption for 2023 is $12.92 million per individual. Since U's gift of $300,000 to her grandson does not exceed this exemption amount, and assuming U has not used up her GST exemption with prior gifts, she would not have to pay a generation-skipping transfer tax on this gift.

During the Current Year, Taxpayer U Gives a Gift of $300,000