generation skipping - definition

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generation skipping - definition



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adj., adv. referring to gifts made through trusts by a grandparent to a grandchild, skipping one's child (the grandchild's parent). Originally intended to avoid or defer federal gift or estate taxes if paid through a "generation skipping trust," it is now subject to a generation skipping tax, and if made directly without a trust, the gift is as taxable as any large gift. In other words, although generation skipping no longer works to avoid taxes, a grandparent can still give or leave gifts under $10,000 a year to a grandchild without a gift tax.



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