Generation-Skipping Transfer Tax Calculator 2025 β GST Tax
Calculate the 40% generation-skipping transfer tax on transfers to grandchildren. Includes $13,610,000 exemption, annual exclusions, and dynasty trust planning.
$
Amount being transferred to skip person $
From prior GST transfers / allocations $
$0
GST Tax Owed
$0
Exemption Used This Transfer
$0
Remaining GST Exemption
$0
Net to Skip Person
GST Tax Calculation
How to Use This GST Tax Calculator
Enter the transfer amount to a skip person (grandchild, great-grandchild, or non-relative 37.5+ years younger). The calculator applies your available GST exemption and annual exclusions, then calculates the 40% GST tax on the taxable portion.
The Formula
Available GST exemption = $13,610,000 β exemption previously used
Exclusions = annual gift exclusions ($19,000 per recipient in 2025)
Net transfer = transfer amount β exclusions
Exemption applied = min(net transfer, available exemption)
GST taxable amount = max(0, net transfer β exemption applied)
GST tax = taxable amount Γ 40%
Net to skip person = transfer amount β GST tax
Exclusions = annual gift exclusions ($19,000 per recipient in 2025)
Net transfer = transfer amount β exclusions
Exemption applied = min(net transfer, available exemption)
GST taxable amount = max(0, net transfer β exemption applied)
GST tax = taxable amount Γ 40%
Net to skip person = transfer amount β GST tax
Example
$2,000,000 gift to grandchild, $500,000 exemption previously used, single:
Available exemption: $13,610,000 β $500,000 = $13,110,000
Exclusion: $0 (no annual exclusion applied)
Exemption applied: $2,000,000 (fully covered)
GST taxable: $0
GST tax: $0 | Remaining exemption: $11,110,000
Available exemption: $13,610,000 β $500,000 = $13,110,000
Exclusion: $0 (no annual exclusion applied)
Exemption applied: $2,000,000 (fully covered)
GST taxable: $0
GST tax: $0 | Remaining exemption: $11,110,000
Extended
GST Planning Strategies
Dynasty trust analysis, direct skip vs trustee distributions, and 2025 sunset planning
Planning strategies to maximize multi-generational wealth transfer.
2025 Sunset Planning β Act Before Year End
| Strategy | GST Exemption Used | Potential Tax Saved | Complexity |
|---|---|---|---|
| Direct gift to grandchildren now | Up to $13.61M | Up to $2.6M per person | Low |
| Fund a dynasty trust | Up to $13.61M | Multiple generations | High |
| Annual exclusion gifts (529) | None needed | $95K per grandchild | Low |
| Spousal Lifetime Access Trust (SLAT) | Up to $13.61M | Estate + GST savings | High |
Dynasty Trust β 30-Year Projection
GST Tax Warning: The GST tax is among the most complex in the tax code. GST exemption must be explicitly allocated to transfers (often via Gift Tax Return Form 709). Failure to properly allocate can result in unintended GST tax. Always work with an estate planning attorney for transfers involving significant assets.
Frequently Asked Questions
What is the generation-skipping transfer (GST) tax?
The GST tax is a flat 40% federal tax on transfers of wealth that skip a generation β such as gifts or inheritances going directly to grandchildren or great-grandchildren (or to non-relatives more than 37.5 years younger than you). It was designed to prevent wealthy families from avoiding estate tax by leaving assets to grandchildren instead of children.
What is the GST exemption for 2025?
The 2025 GST tax exemption is $13,610,000 per person (same as the federal estate tax exemption). Married couples can shelter up to $27,220,000 combined using portability. This exemption is scheduled to sunset after December 31, 2025, reverting to approximately $7 million (inflation-adjusted) unless Congress acts.
Who is a "skip person"?
A skip person is anyone who is two or more generations below you: grandchildren, great-grandchildren, and further descendants. For non-relatives, anyone more than 37.5 years younger than you is a skip person. Transfers to trusts can also be GST transfers if all trust beneficiaries are skip persons.
Can I use annual gift tax exclusions for GST?
Yes. The annual gift tax exclusion ($18,000 per recipient in 2024, $19,000 in 2025) is also excluded from GST. If you give $19,000 per year to a grandchild, it is excluded from both gift tax and GST tax. For 529 plans, you can front-load up to 5 years of annual exclusions ($95,000 per beneficiary) in one year without GST.
What is a dynasty trust and how does it avoid GST?
A dynasty trust (also called perpetual trust) is irrevocable trust that uses your GST exemption when funded, allowing assets to grow and benefit multiple generations without triggering estate or GST tax at each generation. States like South Dakota, Nevada, and Alaska allow perpetual trusts. With the sunset of the higher exemption, funding a dynasty trust before year-end 2025 is a popular planning strategy.