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ESTATES, TRUSTS & GIFTS

address, and taxpayer identification entire trust would no longer be exempt interest is $16,000 ($17,000 for 2023).
number of each trustee and grantor, as from GST tax. The gift tax annual exclusion for gifts of
well as the general nature and estimated a present interest to a spouse who is not
total value of the trust’s assets. Inflation adjustments a U.S. citizen is $164,000 ($175,000 for
Limit duration of generation- The IRS released Rev. Proc. 2021-45, 2023).
skipping transfer exemption: This setting forth inflation adjustments for Interest on a certain portion of
provision would limit the GST exemp- various tax items for 2022, and, for 2023, estate tax payable in installments:
tion to “(a) direct skips and taxable dis- inflation-adjusted amounts are set forth The dollar amount used to determine
tributions to beneficiaries no more than in Rev. Proc. 2022-38.¹³ The follow- the “2% portion” (for purposes of calcu-
two generations below the transferor, ing may be of interest to estate plan- lating interest under Sec. 6601(j)) of the
and to younger generation beneficiaries ning professionals: estate tax, extended as provided in Sec.
who were alive at the creation of the Unified credit against estate 6166, is $1,640,000. For 2023, the dollar
trust; and (b) taxable terminations oc- tax: The basic exclusion amount is amount is $1,750,000. ■
curring while any person described in (a) $12,060,000 for determining the
is a beneficiary of the trust,”¹² although amount of the unified credit against es-
Sec. 2653 (regarding the taxation of tate tax under Sec. 2010. For decedents Contributors
multiple skips) would not apply for these dying in calendar 2023, the basic exclu-
purposes. For purposes of determining sion amount is $12,920,000. Justin Ransome, CPA, J.D., MBA, is a
the duration of GST exemption, a trust Valuation of qualified real prop- partner in the National Tax Department of
created before the date of enactment erty in decedent’s gross estate: If Ernst & Young LLP in Washington, D.C.
(i.e., a grandfathered trust) would be the executor elects to use the special-use He would like to thank his colleagues
deemed to have been created on the date valuation method under Sec. 2032A for in the firm’s National Tax Department in
of enactment. As a result, trust assets qualified real property, the aggregate Private Tax for their contributions to this
would be exempted from GST tax only decrease in the value of the qualified real article, as well as Fran Schafer for her
during the life of any beneficiary who property resulting from electing to use thoughtful comments on the article. The
is no younger than the grandchild of Sec. 2032A for purposes of the estate views expressed here are those of the
the transferor or a beneficiary who is a tax cannot exceed $1,230,000. The author and do not necessarily reflect the
member of a younger generation who amount for decedents dying in 2023 is views of Ernst & Young LLP. For more
was alive at the creation of the trust. $1,310,000. information about this article, contact
After this period, the inclusion ratio of Gift tax annual exclusion: The gift thetaxadviser@aicpa.org.
the trust would increase to 1, and the tax annual exclusion for gifts of a present

AICPA RESOURCES

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CPE self-study
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Estate & Trust Primer — Tax Staff Essentials
The Adviser’s Guide to Financial and Estate Planning,
Vol. 1 Estate Planning Certificate Program (Exam + Course)

For more information or to make a purchase, visit aicpa.org/cpe-learning or call the Institute at 888-777-7077.

12. Greenbook, p. 48. 13. Although Rev. Proc. 2022-38 was issued on Oct. 18, 2022, after the period
covered by this article, its corresponding amounts are included here for
reference and comparison.

32 January 2023 The Tax Adviser