What Does the Generation Skipping Tax Do

question 24

Multiple Choice

What does the generation skipping tax do?

• A) It imposed additional tax on gifts and bequests that are made from grandparent to grandchild.
• B) It allows grandparents to skip paying taxes on funds gifted to grandchildren.
• C) It encourages parents to skip leaving funds to their own children and to plan on leaving their estate to their grandchildren.
• D) All of the above
• E) none of the above

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Definitions:

Fund

A collection of money set aside for a specific purpose or invested to generate income.

Exist

To have actual being or reality.

Value

The importance, worth, or usefulness of something.

Instrument

An instrument in legal and financial contexts refers to a formal document that records a legal right, obligation, or transaction, such as a contract, will, promissory note, or security.