Sec. 405. Elimination of generation-skipping transfer tax exemption for certain trusts
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Section 2642 is amended by adding at the end the following new subsection: In the case of any generation-skipping transfer made from a trust that is not a qualifying trust, the inclusion ratio with respect to any property transferred in such transfer shall be 1. For purposes of this subsection, the term qualifying trust means a trust for which the date of termination of such trust is not greater than 50 years after the date on which such trust is created. In the case of any trust created before the date of the enactment of this subsection, such trust shall be deemed to be a qualifying trust for a period of 50 years after the date of the enactment of this subsection.
In the case of any portion of a trust which is treated as a separate trust under section 2654(b)(1), such separate trust shall be treated as created on the date of the first transfer described in such section with respect to such separate trust. In the case of any generation-skipping transfer of property which involves the transfer of property from 1 trust to another trust, the date of the creation of the transferee trust shall be treated as being the earlier of— the date of the creation of such transferee trust, or the date of the creation of the transferor trust.
In the case of multiple transfers to which the preceding sentence applies, the date of the creation of the transferor trust shall be determined under the preceding sentence before the application of the preceding sentence to determine the date of the creation of the transferee trust. The Secretary may prescribe such regulations or other guidance as may be necessary or appropriate to carry out this subsection. . The amendments made by this section shall take effect on the date of the enactment of this Act.