CRittenhouse
Level 1
‎04-13-2021 05:01 PM

I'm preparing a gift tax return for a client. We set up a trust for child and the client funded it with more than the $11.58 million exemption amount in 2020. The trust is an indirect skip (possibility to pass to future generations), and I am electing to make a Section 2632(c) election to treat the trust as a GST exempt trust. My tax software (ProSeries) has coded everything correctly; however, I cannot get the trust entry to appear on Schedule D (without a manual override) to trigger both a gift tax and GST tax calculation. Specific help on ProSeries is appreciated; however, I'm looking for broader underlying help about the 709 as to where this trust would be reported on Schedule D (since it pulls only from those gifts classified as direct skips).

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sjrcpa
Level 15
‎04-13-2021 05:17 PM

Thinking Lacerte like (I don't use ProSeries), can you indicate the beneficiary (trust) is a skip "person"?


The more I know the more I don’t know.
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CRittenhouse
Level 1
‎04-13-2021 06:04 PM

I've figured out the solution, as I was approaching it incorrectly.  I correctly chose this as an indirect skip trust; meaning that I could allocate GST exemption, but it does not currently trigger a GST tax.  While the transfer will trigger gift tax owed, it will not trigger GST tax owed until there is a taxable distribution or taxable termination at some future date to a beneficiary who is a skip person.  At which point, only the portion of the trust not exempt to GST tax (based on the applicable inclusion ratio) (i.e. the amount not sheltered (including any applicable appreciation thereon) by the Section 2632(c)(3) allocation of the client's remaining GST exemption) would be subject to the GST tax.  

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MaryBishop
Level 1
‎04-12-2023 08:04 PM

But how do you show the decrease in the remaining GST Exemption amount in Schedule D Part 2.  I assume you have to overide and make the entry?

 

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