The exemption from federal generation skipping transfer taxes has increased over the years while the tax rate has decreased. Below is a chart that shows the changes in the generation skipping transfer tax exemption and tax rate from 1997 through 2013.
Tax years 2010 through 2012 are based on the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act ("TRA 2010") that was signed into law by President Obama on December 17, 2010. This law is only good for two years and so it will sunset on December 31, 2012, meaning that on January 1, 2013, the federal generation skipping transfer tax exemption and rate will default to the numbers that were in effect in 2001/2002.
To view the federal estate tax exemptions and top estate tax rates from 1916 (the first year the estate tax was enacted) through 1997, please refer to the following: Table Showing Federal Estate Tax Exemption and Rate: 1916 - 1997.
To view the federal estate tax exemptions and top estate tax rates from 1997 through 2013, please refer to the following: Table Showing Federal Estate Tax Exemption and Rate: 1997 - 2013.
To view the federal lifetime gift tax exemptions and top gift tax rates from 1997 through 2013, please refer to the following:Lifetime Exemption From Federal Gift Taxes: 1997 - 2013.
To view the annual exclusion from gift taxes from 1997 through 2012, please refer to the following: Annual Exclusion From Gift Taxes: 1997 - 2012.*TRA 2010 provides that the estate tax exemption, lifetime gift tax exemption, and generation-skipping transfer tax exemption will be indexed for inflation in 2012, hence the $120,000 increase in the 2012 generation skipping transfer tax exemption.
**Prior law provided that the generation-skipping transfer tax exemption would be indexed for inflation, so this is an estimate of the inflation-adjusted exemption.
Historical and Future Generation Skipping Transfer Tax Exemptions and Rates
| Year | GST Exemption | GST Tax Rate |
| 1997 | $1,000,000 | 55% |
| 1998 | $1,000,000 | 55% |
| 1999 | $1,010,000 | 55% |
| 2000 | $1,030,000 | 55% |
| 2001 | $1,060,000 | 55% |
| 2002 | $1,100,000 | 50% |
| 2003 | $1,120,000 | 49% |
| 2004 | $1,500,000 | 48% |
| 2005 | $1,500,000 | 47% |
| 2006 | $2,000,000 | 46% |
| 2007 | $2,000,000 | 45% |
| 2008 | $2,000,000 | 45% |
| 2009 | $3,500,000 | 45% |
| 2010 | No generation skipping transfer tax | N/A |
| 2011 | $5,000,000 | 35% |
| *2012 | $5,120,000 | 35% |
| **2013 | $1,400,000 | 55% |
