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Estate, Gift, and Generation-Skipping Transfer Tax #700426

Course Overview

Credit

Amount

CPA

EA / OTRP

Course Author: Andrew Clark, EA Field of Study (CPA): Taxes Field of Study (EA/OTRP): Federal Tax Law

Course Description

Course publication/revision date: This course was updated on 7/21/2026 (covers 2026 tax year).

The IRS has a unified wealth transfer taxation system to ensure that any assets transferred my means of gifts, deaths, and gifts that skip a generation are taxed accordingly. This course will discuss estate planning and estate taxes, gift taxes, and generation-skipping transfer taxes in detail. This course will describe the tools that are available for estate planning and will define the benefits of using each tool. This course will describe how to identify what is included in the gross estate and demonstrate how to calculate the gross estate amounts. This course will also identify the conditions under which filing a gift tax return is required. Finally, this course will identify and discuss the different types of generation-skipping transfers and how each are taxed by the IRS. This course has been updated to reflect all current changes to tax law and amounts for 2026.

Table of Contents

Part 1 – Estates, Estate Taxes and Estate Planning Tools1

Estate Tax Defined	1
Estate Planning	1
Attorney	1
Accountant	3
Insurance Agents	5
Financial Planner	6
Administration	8
Internal Revenue Service (IRS)	8
Intestacy	9
Probate Court	9
Trustee	9
Executor / Executrix	9
Family Responsibilities	10
Tools and Techniques for Estate Planning	11
The Probate Process	11
Disposing of Property using a Will	11
Disposing of Property without a Will	12
Non-Probate Transfers	12
Joint Tenancy with Right of Survivorship	12
Tenancy in Common	13
Retirement Accounts	13
Payable on Death Accounts (POD)	13
Life Insurance of a Decedent	13
Gifts Completed	13
Transfers Executed by Means of a Trust	14
Trusts	14
Trusts Defined	14
Reasons for Using a Trust	14
Living vs. Testamentary Trusts	15
Building Blocks of a Trust	15
Trusts - Revocable	16
Trusts - Living	16
Trusts - Irrevocable	17
Trusts - Testamentary	17
The Taxation of Trusts	18
Grantor Trusts	18
Grantor Retained Income Trusts	19
Using Revocable Trusts	20
Estates Compared to Living Trusts	20
Using Irrevocable Trusts	21
Capital Gains Treatment in Trusts	21
Deduction of Estate Planning Expenses	22
Deduction of Expenses	22
Gift Tax with Respect to Trusts	22
Estate Tax with Respect to Trusts	22
Unlimited Marital Deduction	23
Marital Deduction Trust	23
Qualified Terminable Interest Property (QTIP) Trust	23
"A-B" Trusts	24
"A-B-C" (QTIP) Trust	25
Tax Basis	26
Alternative Valuation	26
Revocable Living Trust Clauses	26
Identification Clause	27
Trustee Clause	27
Property Transfer Clause	27
Revocation and Amendment Clause	27
Income and Principle Clause	27
Recital Clause	27
Trustee Requirements	27
Trust Termination Clause	28
Life Insurance Trust	29
Annual gift tax exclusion	29
Unlimited Donees	29
Gifts Exceeding $19,000	29
Lifetime Exclusion for an Estate	30
Unlimited Marital Deduction	30
Gift Splitting	31
Consent to Gift Split Applies to All Gifts	31
Gift Splitting Requirements	33
Community Property States	33
5-year Deferral and 10-year Installment Payment	33
Installment Sale to Family Members	33
Self-Canceling Installment Notes	34
Private Annuities	34
Crummey Trusts	34
Charitable Remainder Trusts	35
Minor Trusts	35
Family Limited Partnerships	35
Qualified Personal Residence Trusts (QPRTs)	36
Grantor Retained Annuity Trust	36
Grantor Retained Unitrusts (GRUTs)	36
Estate Planning Goals	37
Estate Plan Outcomes	37
Types of Estate Taxes	38
Part 1 Review Questions	39
Part 1 Review Question Answers	41

Part 2 - Estate Tax Calculation44

The Gross Estate	44
Liabilities of the Decedent	45
Administration Expenses	45
Court decree.	45
Debts	46
Dower, Curtesy, or Statutory Share of the Living Spouse	47
Power of Appointment	47
Joint Tenants with Right to Survivorship	48
Transferred property in which the decedent retained an interest	49
Government Obligations	49
Life Insurance Proceeds	49
Annuities and Survivor Benefits	50
Medical Insurance Expenses	51
Medical Insurance Reimbursements	51
Gifts within 3 Years of Death	51
Gifts of Life Insurance	53
"Inter Vivos" Transfers	54
Community Property	54
Qualified Terminable Interest Property (QTIP)	56
Part 2 Review Questions	58
Part 2 Review Question Answers	60

Part 3 - Valuing the Gross Estate64

Introduction	64
Expenses	66
Charitable Contributions	69
Marital Transfers	70
State Death Tax Deduction	72
Gross Estate Credits	73
Applicable credit amount (ACA).	73
Portability of unused applicable exclusion amount	73
Portability provisions	74
Irrevocable Election of Portability	76
Individuals who can Make a Portability Election for an Estate	76
Portability Examples	77
Portability Provisions to the Surviving Spouse's Estate.	77
Portability Provisions when Surviving Spouse is Not a US Citizen	79
Examine returns of deceased spouses	81
Estates of nonresidents who are not citizens DSUE amounts	82
Federal estate tax paid on prior transfers	82
Foreign Death Taxes	83
Credit for gift taxes on pre-1977 gifts	83
Estate Tax Payment and Return	85
Reporting of value not required for certain property	85
Return Due Dates	86
Alternate Valuation Method Recapture	89
Assessment Period	89
Basis reporting requirement	89
Portability election for unused applicable exclusion amount	89
Tax charged to property	91
Estate taxation on nonresident aliens	92
Part 3 Review Questions	95
Part 3 Review Question Answers	97

Part 4 – Gift Taxes and Generation Skipping Taxes101

Gift Tax Defined	101
Unified Transfer Tax System	102
Lifetime Exclusion for an Estate	102
Why Gift Taxes are Required	103
Timing of a Gift	103
Gifts to an Entity	103
Crummey Trusts	104
Gifts to Minors	104
Outright gifts.	104
Guardianship	105
Custodial arrangements.	105
Present Interest of Gifts to a Minor	105
Qualified State Tuition Programs	106
Not all Gifts are Subject to Gift Tax	106
Gifts that do not exceed annual exclusion	106
Gifts to a Spouse	106
Charitable Gifts	107
Transfers to charitable organizations not subject to federal gift tax.	107
Political Contributions	107
Qualified Tuition Payments	107
Medical Costs	107
Annual Exclusion Amount	107
Unlimited Donees	107
Gifts Exceeding $19,000	108
Present Interest vs. Future Interest	108
Gift Splitting	109
Consent to Gift Split Applies to All Gifts	109
Gift Splitting Requirements	111
Community Property States	112
Gift Tax Return	113
Gift Tax Return Due Date:	115
Valuation	115
Real Estate	117
Valuation Understatement	117
Computing Gift Tax	118
Generation Skipping Transfers	119
Transfer Types	119
Exemption Amount	120
How to compute generation skipping transfer tax	120
Generation Skipping Terminations Tax (GSTT)	121
Generation Skipping Distribution Tax (GSDT)	122
Direct Skip Gift Tax (DSGT)	123
Direct Skip Estate Tax (DSET)	123
Filing the return and paying the GSTT	124
Gifts and bequests from expatriates	125
One Big Beautiful Bill Act – Changes related to Estate, Gift, and Generation-Skipping Transfers Taxes	128
Sec. 70106 – Extension and Enhancement of Increased Estate and Gift Tax Exemption Amounts	128
Part 4 Review Questions	129
Part 4 Review Question Answers	131

Glossary135

Index138

Course Details

Author: Andrew Clark, EA

Andrew is an Enrolled agent (#00131887-EA) and the President of both Andrew Clark Enterprises and Tax CE Publishing. Andrew has been involved in the CPE market since 2010, and in addition to writing CPE courses, Andrew provides tax consulting and preparation services to clients in the Sacramento region. Andrew is also an entrepreneur and enjoys consulting with other entrepreneurs to help them achieve success in their own businesses. Andrew enjoys both reading about taxation topics and creating easy-to-understand programs revolving around these complex concepts. He is also an in-demand lecturer due to his thorough understanding of the tax code and tax code changes.

Publication/Revision Date: 7/21/2026

Course Exam Questions (online): 40 (multiple-choice)

Program Delivery Method: Self-Study (NASBA QAS Self-Study)

Available Formats of Course Text: Downloadable PDF, Printed/Mailed

Course Level, Prerequisites, and Advance Preparation Requirements

License	Course Level	Prerequisites	Advance Preparation Requirements
CPA	Overview	None	None
EA/OTRP	Overview	None	None

* This program is appropriate for professionals at all organizational levels.

Sponsor ID Numbers

National Registry of CPE Sponsors I.D.: 107615

IRS Qualified Sponsor I.D.: FWKKO — Course I.D.: FWKK0-T-00788-26-S

State CPA Board Sponsor ID Numbers (where applicable)

Florida Division of Certified Public Accounting: 0004761

Hawaii Board of Public Accountancy: 14003

New York State Board for Public Accountancy: 002146

Ohio Accountancy Board: CPE .51 PSR

Pennsylvania State Board of Accountancy: PX178025

Texas State Board of Public Accountancy: 009349

Learning Objectives

As a result of studying the course material, you should be able to meet the objectives listed below:

Describe estate taxes and the purpose of estate taxes according to the Internal Revenue Code (IRC),
Identify the various types of trusts that can be used for estate planning,
Recognize what is included in the gross estate of a decedent,
Calculate the gross estate of a decedent,
Recognize the various deductions and credits available when calculating the gross estate of a decedent, and
Describe the purpose of Generation Skipping Transfers and the Generation Skipping Transfer Tax according to the IRC.

Online Book, Online Exam

$65.00

Hardcopy Book, Online Exam

$83.00