Basis adjustment
In general
Except as provided in paragraph (2), if property is transferred in a generation-skipping transfer, the basis of such property shall be increased (but not above the fair market value of such property) by an amount equal to that portion of the tax imposed by section 2601 with respect to the transfer which is attributable to the excess of the fair market value of such property over its adjusted basis immediately before the transfer. The preceding shall be applied after any basis adjustment under section 1015 with respect to the transfer.
Certain transfers at death
If property is transferred in a taxable termination which occurs at the same time as and as a result of the death of an individual, the basis of such property shall be adjusted in a manner similar to the manner provided under section 1014(a); except that, if the inclusion ratio with respect to such property is less than 1, any increase or decrease in basis shall be limited by multiplying such increase or decrease (as the case may be) by the inclusion ratio.
Certain trusts treated as separate trusts
Disclaimers
For provisions relating to the effect of a qualified disclaimer for purposes of this chapter, see section 2518.
Limitation on personal liability of trustee
Pub. L. 99–514, title XIV, § 1431(a)100 Stat. 2727Pub. L. 100–647, title I, § 1014(g)(12)102 Stat. 3565Pub. L. 101–239, title VII, § 7811(j)(2)103 Stat. 2411Pub. L. 105–206, title VI, § 6013(a)(4)(B)112 Stat. 819Pub. L. 113–295, div. A, title II, § 221(a)(95)(B)(iii)128 Stat. 4051(Added , , ; amended , (13), , , 3566; , , ; , , ; , , .)
Editorial Notes
Amendments
Pub. L. 113–2952014—Subsec. (a)(1). struck out “(computed without regard to section 2604)” after “section 2601”.
Pub. L. 105–2061998—Subsec. (b). inserted at end “For purposes of this subsection, a trust shall be treated as part of an estate during any period that the trust is so treated under section 645.”
Pub. L. 101–2391989—Subsec. (a)(1). inserted at end “The preceding shall be applied after any basis adjustment under section 1015 with respect to the transfer.”
Pub. L. 100–647, § 1014(g)(12)1988—Subsec. (a)(2). , inserted “or decrease” after “any increase” and “or decrease (as the case may be)” after “such increase”.
Pub. L. 100–647, § 1014(g)(13)Subsec. (b). , substituted “Certain trusts” for “Separate shares” in heading and amended text generally. Prior to amendment, text read as follows: “Substantially separate and independent shares of different beneficiaries in a trust shall be treated as separate trusts.”
Statutory Notes and Related Subsidiaries
Effective Date of 2014 Amendment
Pub. L. 113–295section 221(b) of Pub. L. 113–295section 1 of this titleAmendment by effective , subject to a savings provision, see , set out as a note under .
Effective Date of 1998 Amendment
Pub. L. 105–206Pub. L. 105–34section 1305 of Pub. L. 105–34section 6024 of Pub. L. 105–206section 1 of this titleAmendment by effective, except as otherwise provided, as if included in the provisions of the Taxpayer Relief Act of 1997, , to which such amendment relates (see ), see , set out as a note under .
Effective Date of 1989 Amendment
Pub. L. 101–239Pub. L. 100–647section 7817 of Pub. L. 101–239section 1 of this titleAmendment by effective, except as otherwise provided, as if included in the provision of the Technical and Miscellaneous Revenue Act of 1988, , to which such amendment relates, see , set out as a note under .
Effective Date of 1988 Amendment
Pub. L. 100–647Pub. L. 99–514section 1019(a) of Pub. L. 100–647section 1 of this titleAmendment by effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986, , to which such amendment relates, see , set out as a note under .
Effective Date
section 2611 of this titlesection 1433 of Pub. L. 99–514section 2601 of this titleSection applicable to generation-skipping transfers (within the meaning of ) made after , except as otherwise provided, see , set out as a note under .