Mastering IRC 2632 GST Exemption Allocation Rules: Identifying GST Trusts and Indirect Skips

Electing out of Default Allocation Treatment, Making Retroactive Allocations and Using Allocation Ordering Rules

Recording of a 110-minute CPE webinar with Q&A

Conducted on Thursday, June 22, 2017
Recorded event now available

This webinar will provide tax advisers and compliance professionals with a thorough and practical exploration of the GST exemption allocation rules in IRC Section 2632. The panel will take a line-by-line approach to the Code provisions, discussing default treatment and going in depth into the elections available in subsections 2632(b) and 2632(c). The webinar will also provide useful guidance into translating the election provisions onto Form 709 Schedule A Parts 2 and 3.


Critical to mastering multi-generational gift tax planning and compliance is a thorough understanding of the provisions and rules found in IRC 2632 and its regulatory guidance. Section 2632 sets the rules for generation skipping tax exemptions and is one of the most complex aspects of the wealth transfer tax regime, and advisers can avoid costly tax and penalties through accurate and careful application of the 2632 provisions.

Section 2632(b)(2) states the general rule that a transferor’s unused GST exemption is automatically allocated to any direct skip to the extent necessary to bring the inclusion ratio of the transferred property to zero. The Code allows taxpayers who made direct skips to opt out of the automatic allocation rule by making an election under Section 2632(b)(3). This election is reported on Form 709 Schedule A, Part 2—Direct Skips.

IRC 2632(c)(3) defines “indirect skips” as transfers to a trust that may have a generation skipping transfer in the future. Section 2632(c)(3)(b) lists the characteristics of a GST trust, and provides the default rules for allocating GST exemptions to GST trusts on indirect skip transfers. As in direct skips, Section 2632(c)(5) provides for an election out of the default treatment. Tax professionals must grasp the 2632(c) provisions identifying trusts that may have GST consequences to avoid unexpected GST tax in the future.

Listen as our experienced panel provides a comprehensive guide to the Section 2632 rules on allocating GST exemptions to minimize the tax impact of GST tax.


  1. Section 2632(b) direct skip general rule on exemption allocation
  2. Election provisions and mechanics for direct skips in Section 2632(b)(3)
  3. Section 2632(c)(3)(B) definitions of GST trusts
  4. Election to opt into and out of general exemption allocation rules for indirect skip transfers
  5. Retroactive allocation provisions


The panel will discuss these and other important issues:

  • Identifying provisions in trust documents that may require transfers to be reported as an indirect skip transaction under Section 26632(c)
  • When would a taxpayer want to elect out of deemed allocation under 2632(b)?
  • Reporting elections on Form 709 Schedule A
  • Exemption allocation rules for transfers to trusts found in Section 2632(c)
  • Retroactive allocations under Section 2632(d)

Learning Objectives

After completing this course, you will be able to:

  • Identify provisions in trust documents that may require transfers to be reported as an indirect skip transaction under Section 2632(c)
  • Determine when a taxpayer would want elect out of deemed allocation under Section 2632(b)
  • Discern elections on Form 709 Schedule A
  • Recognize exemption allocation rules for transfers to trusts found in Section 2632(c)
  • Ascertain retroactive allocations under Section 2632(d)


Diana S.C. Zeydel, Shareholder
Greenberg Traurig, Miami

Ms. Zeydel is the National Chair of the firm’s Trusts and Estates practice, and she focuses on estate, trust and tax planning for high net worth individuals and families. Her practice includes planning for U.S. and non-U.S. citizens and residents, and she specializes in sophisticated intra-generational wealth transfer strategies and business succession planning. She assists clients in litigated probate, trust and guardianship matters, and represents clients before the Internal Revenue Service in matters involving complex fiduciary income tax and estate, gift and generation-skipping transfer tax matters.

Nathan R. Brown
Proskauer Rose, Boca Raton, Fla.

Mr. Brown advises clients on a wide range of tax and estate planning matters, as well as estate and trust administration. He assists high net worth individuals and families develop suitable estate plans to maximize and protect the transfer of wealth to future generations. He is experienced in implementing advanced estate planning techniques, including irrevocable insurance trusts, grantor retained annuity trusts, sales to defective grantor trusts, inter vivos qualified terminable interest property trusts, family limited partnerships, all aspects of estate and trust administration and preparing Federal Estate Tax Returns.

EA Credit

Enrolled Agent credit processing is available for an additional fee per person.

EA Processing $5.00


Recorded Event

Includes full event recording plus handouts.

Note: Self-study CPE and EA credits are not offered on recorded events.

Recorded Webinar Download $147.00

How does this work?

Recorded Audio Download (MP3) $147.00

How does this work?


National Registry of CPE Sponsors

Strafford Publications, Inc. is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of accountancy have final authority on the acceptance of individual courses for CPE credit. Complaints regarding registered sponsors may be submitted to the National Registry of CPE Sponsors through its website:

IRS Approved Provider

Strafford is an IRS-approved continuing education provider offering certified courses for Enrolled Agents (EA) and Tax Return Preparers (RTRP).

Program Materials

Requires Adobe Reader 8 or later. Download Acrobat FREE.

Program Materials

Requires Adobe Reader 8 or later. Download Acrobat FREE.

or call 1-800-926-7926

CPE Credit

Strafford is a NASBA CPE sponsor and our live webinars qualify for CPE credits. They offer you a high quality, cost effective, and convenient CPE option, with no lost travel time or expenses.

or call 1-800-926-7926

EA Credit

Strafford is an IRS approved continuing education provider and this course is approved for 2 enrolled agent (EA) credit hours.

or call 1-800-926-7926

Customer Reviews

I purchased the conference a few minutes after it began and the customer service rep was very helpful and got me signed up and logged into the conference very quickly.

Joanna Johnston

Savas Greene & Company

I loved the tools and handouts. Every CPE class should offer these kind of tools.

Jackie Meyer

Sample and Bailey

I appreciated the flow of the information offered and the ease at which I could follow the handouts.

Larry Bruck

WISS & Company

The conference was technical, informative and presented at a good pace.

Krystal Ching


I liked the concentration on specific issues and examples.

Edita Rimalovsky

Komisar Brady & Co.

or call 1-800-926-7926

Our Guarantee

Strafford webinars are backed by our 100% Unconditional Money-Back Guarantee: if you are not satisfied with any of our products, simply let us know and get a full refund. For more information regarding complaints and refunds, please contact us at 1-800-926-7926 ext 10. Complaints regarding this program can be submitted via the course evaluation found in the “Thank you” e-mail at the end of the course.