26 U.S.C. § 2613 — Skip person and non-skip person defined

Page 2655 TITLE 26—INTERNAL REVENUE CODE § 2613 (Added Pub. L. 94–455, title XX, § 2006(a), Oct. 4, 1976, 90 Stat. 1883; amended Pub. L. 99–514, title XIV, § 1431(a), Oct. 22, 1986, 100 Stat. 2719; Pub. L. 100–647, title I, § 1014(g)(5)(B), (7), (15), Nov. 10, 1988, 102 Stat. 3564–3566; Pub. L. 105–34, title V, § 511(b), Aug. 5, 1997, 111 Stat. 861.) Editorial Notes AMENDMENTS 1997—Subsec. (c)(2). Pub. L. 105–34, § 511(b)(2), sub- stituted ‘‘section 2651(f)(2)’’ for ‘‘section 2651(e)(2)’’. Pub. L. 105–34, § 511(b)(1), redesignated par. (3) as (2) and struck out heading and text of former par. (2). Text read as follows: ‘‘For purposes of determining whether any transfer is a direct skip, if— ‘‘(A) an individual is a grandchild of the transferor (or the transferor’s spouse or former spouse), and ‘‘(B) as of the time of the transfer, the parent of such individual who is a lineal descendant of the transferor (or the transferor’s spouse or former spouse) is dead, such individual shall be treated as if such individual were a child of the transferor and all of that grand- child’s children shall be treated as if they were grand- children of the transferor. In the case of lineal descend- ants below a grandchild, the preceding sentence may be reapplied. If any transfer of property to a trust would be a direct skip but for this paragraph, any generation assignment under this paragraph shall apply also for purposes of applying this chapter to transfers from the portion of the trust attributable to such property.’’ Subsec. (c)(3). Pub. L. 105–34, § 511(b)(1), redesignated par. (3) as (2). 1988—Subsec. (a)(2). Pub. L. 100–647, § 1014(g)(15), amended par. (2) generally. Prior to amendment, par. (2) read as follows: ‘‘If, upon the termination of an in- terest in property held in a trust, a specified portion of the trust assets are distributed to skip persons who are lineal descendants of the holder of such interest (or to 1 or more trusts for the exclusive benefit of such per- sons), such termination shall constitute a taxable ter- mination with respect to such portion of the trust property.’’ Subsec. (c)(2). Pub. L. 100–647, § 1014(g)(7), in closing provisions, inserted at end ‘‘If any transfer of property to a trust would be a direct skip but for this paragraph, any generation assignment under this paragraph shall apply also for purposes of applying this chapter to transfers from the portion of the trust attributable to such property.’’ Subsec. (c)(3). Pub. L. 100–647, § 1014(g)(5)(B), added par. (3). 1986—Pub. L. 99–514 amended section generally, sub- stituting provisions covering definition and application of ‘‘taxable termination’’, ‘‘taxable distribution’’, and ‘‘direct skip’’ for former provisions which indicated who the ‘‘deemed transferor’’ would be for purposes of this chapter and that, for purposes of determining the person deemed the transferor, a parent related to the grantor of a trust by blood or adoption was to be deemed more closely related than a parent related to a grantor by marriage. Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 1997 AMENDMENT Pub. L. 105–34, title V, § 511(c), Aug. 5, 1997, 111 Stat. 861, provided that: ‘‘The amendments made by this sec- tion [amending this section and section 2651 of this title] shall apply to terminations, distributions, and transfers occurring after December 31, 1997.’’ EFFECTIVE DATE OF 1988 AMENDMENT Amendment by Pub. L. 100–647 effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986, Pub. L. 99–514, to which such amendment relates, see section 1019(a) of Pub. L. 100–647, set out as a note under section 1 of this title. EFFECTIVE DATE OF 1986 AMENDMENT Section applicable to generation-skipping transfers (within the meaning of section 2611 of this title) made after Oct. 22, 1986, except as otherwise provided, see sec- tion 1433 of Pub. L. 99–514, set out as a note under sec- tion 2601 of this title. § 2613. Skip person and non-skip person defined (a) Skip person For purposes of this chapter, the term ‘‘skip person’’ means— (1) a natural person assigned to a generation which is 2 or more generations below the gen- eration assignment of the transferor, or (2) a trust— (A) if all interests in such trust are held by skip persons, or (B) if— (i) there is no person holding an interest in such trust, and (ii) at no time after such transfer may a distribution (including distributions on termination) be made from such trust to a nonskip person. (b) Non-skip person For purposes of this chapter, the term ‘‘non- skip person’’ means any person who is not a skip person. (Added Pub. L. 94–455, title XX, § 2006(a), Oct. 4, 1976, 90 Stat. 1884; amended Pub. L. 95–600, title VII, § 702(n)(2), (3), Nov. 6, 1978, 92 Stat. 2935, 2936; Pub. L. 96–222, title I, § 107(a)(2)(B), Apr. 1, 1980, 94 Stat. 222; Pub. L. 99–514, title XIV, § 1431(a), Oct. 22, 1986, 100 Stat. 2720; Pub. L. 100–647, title I, § 1014(g)(5)(A), Nov. 10, 1988, 102 Stat. 3564.) Editorial Notes AMENDMENTS 1988—Subsec. (a)(1). Pub. L. 100–647 inserted ‘‘natural’’ before ‘‘person’’. 1986—Pub. L. 99–514 amended section generally, sub- stituting definitions of ‘‘skip person’’ and ‘‘non-skip person’’ for former provisions which defined and ap- plied the terms ‘‘taxable distribution’’, ‘‘taxable termi- nation’’, ‘‘younger generation beneficiary’’, and ‘‘re- lated or subordinate trustee’’. 1980—Subsec. (e)(2)(A)(i). Pub. L. 96–222, § 107(a)(2)(B)(i), inserted ‘‘(other than as a potential ap- pointee under a power of appointment held by an- other)’’ after ‘‘trust’’. Subsec. (e)(2)(B). Pub. L. 96–222, § 107(a)(2)(B)(ii), re- designated cls. (iii) to (v) as (iv) to (vi), added cl. (iii), and struck out cl. (vi) which related to an employee of a corporation in which the grantor or any beneficiary of the trust is an executive. 1978—Subsec. (b)(2)(B). Pub. L. 95–600, § 702(n)(3), sub- stituted ‘‘a present interest and a present power’’ for ‘‘an interest and a power’’ and ‘‘present interest or present power’’ for ‘‘interest or power’’ wherever ap- pearing. Subsec. (e). Pub. L. 95–600, § 702(n)(2), inserted provi- sions relating to powers of independent trustees and definition of a related or subordinate trustee. Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 1988 AMENDMENT Amendment by Pub. L. 100–647 effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986, Pub. L. 99–514, to which such amendment relates, see section 1019(a) of Pub. L. 100–647, set out as a note under section 1 of this title. Page 2656 TITLE 26—INTERNAL REVENUE CODE [§ 2614 EFFECTIVE DATE OF 1986 AMENDMENT Section applicable to generation-skipping transfers (within the meaning of section 2611 of this title) made after Oct. 22, 1986, except as otherwise provided, see sec- tion 1433 of Pub. L. 99–514, set out as a note under sec- tion 2601 of this title. EFFECTIVE DATE OF 1980 AMENDMENT Amendment by Pub. L. 96–222 effective, except as oth- erwise provided, as if it had been included in the provi- sions of the Revenue Act of 1978, Pub. L. 95–600, to which such amendment relates, see section 201 of Pub. L. 96–222, set out as a note under section 32 of this title. EFFECTIVE DATE OF 1978 AMENDMENT Pub. L. 95–600, title VII, § 702(n)(5), Nov. 6, 1978, 92 Stat. 2936, as amended by Pub. L. 99–514, § 2, Oct. 22, 1986, 100 Stat. 2095, provided that: ‘‘(A) Except as provided in subparagraph (B), the amendments made by this subsection [amending this section, section 2602 of this title, and provisions set out as a note under section 2601 of this title] shall take ef- fect as if included in chapter 13 of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] as added by section 2006 of the Tax Reform Act of 1976 [Pub. L. 94–455, title XX, § 2006, Oct. 4, 1976, 90 Stat. 1879]. ‘‘(B) The amendment made by paragraph (1) [amend- ing provisions set out as a note under section 2601 of this title] shall take effect on October 4, 1976.’’ [§ 2614. Omitted] Editorial Notes CODIFICATION Section, added Pub. L. 94–455, title XX, § 2006(a), Oct. 4, 1976, 90 Stat. 1887; amended Pub. L. 95–600, title VII, § 702(c)(1)(B), Nov. 6, 1978, 92 Stat. 2926; Pub. L. 96–223, title IV, § 401(c)(3), Apr. 2, 1980, 94 Stat. 300, related to special rules for generation-skipping transfers, prior to the general revision of this chapter by Pub. L. 99–514, § 1431(a). Subchapter C—Taxable Amount Sec. 2621. Taxable amount in case of taxable distribu- tion. 2622. Taxable amount in case of taxable termi- nation. 2623. Taxable amount in case of direct skip. 2624. Valuation. Editorial Notes AMENDMENTS 1986—Pub. L. 99–514, title XIV, § 1431(a), Oct. 22, 1986, 100 Stat. 2720, substituted ‘‘Taxable Amount’’ for ‘‘Ad- ministration’’ in subchapter heading, substituted ‘‘Tax- able amount in case of taxable distribution’’ for ‘‘Ad- ministration’’ in item 2621 and ‘‘Taxable amount in case of taxable termination’’ for ‘‘Regulations’’ in item 2622, and added items 2623 and 2624. § 2621. Taxable amount in case of taxable dis- tribution (a) In general For purposes of this chapter, the taxable amount in the case of any taxable distribution shall be— (1) the value of the property received by the transferee, reduced by (2) any expense incurred by the transferee in connection with the determination, collection, or refund of the tax imposed by this chapter with respect to such distribution. (b) Payment of GST tax treated as taxable dis- tribution For purposes of this chapter, if any of the tax imposed by this chapter with respect to any tax- able distribution is paid out of the trust, an amount equal to the portion so paid shall be treated as a taxable distribution. (Added Pub. L. 94–455, title XX, § 2006(a), Oct. 4, 1976, 90 Stat. 1887; amended Pub. L. 97–34, title IV, § 422(e)(4), Aug. 13, 1981, 95 Stat. 316; Pub. L. 99–514, title XIV, § 1431(a), Oct. 22, 1986, 100 Stat. 2720.) Editorial Notes AMENDMENTS 1986—Pub. L. 99–514 amended section generally, sub- stituting provisions relating to taxable amount in case of a taxable distribution for former provisions which related generally to administration of this chapter. See section 2661 of this title. 1981—Subsec. (b). Pub. L. 97–34 substituted ‘‘Section 6166’’ for ‘‘Sections 6166 and 6166A’’ in heading and ‘‘sec- tion 6166 (relating to extension of time’’ for ‘‘sections 6166 and 6166A (relating to extensions of time’’ in text. Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 1986 AMENDMENT Section applicable to generation-skipping transfers (within the meaning of section 2611 of this title) made after Oct. 22, 1986, except as otherwise provided, see sec- tion 1433 of Pub. L. 99–514, set out as a note under sec- tion 2601 of this title. EFFECTIVE DATE OF 1981 AMENDMENT Amendment by Pub. L. 97–34 applicable to estates of decedents dying after Dec. 31, 1981, see section 422(f)(1) of Pub. L. 97–34, set out as a note under section 6166 of this title. § 2622. Taxable amount in case of taxable termi- nation (a) In general For purposes of this chapter, the taxable amount in the case of a taxable termination shall be— (1) the value of all property with respect to which the taxable termination has occurred, reduced by (2) any deduction allowed under subsection (b). (b) Deduction for certain expenses For purposes of subsection (a), there shall be allowed a deduction similar to the deduction al- lowed by section 2053 (relating to expenses, in- debtedness, and taxes) for amounts attributable to the property with respect to which the tax- able termination has occurred. (Added Pub. L. 94–455, title XX, § 2006(a), Oct. 4, 1976, 90 Stat. 1888; amended Pub. L. 99–514, title XIV, § 1431(a), Oct. 22, 1986, 100 Stat. 2720.) Editorial Notes AMENDMENTS 1986—Pub. L. 99–514 amended section generally, sub- stituting provisions relating to taxable amount in case of a taxable termination for former provisions which authorized the Secretary to promulgate regulations. See section 2663 of this title.