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Interest rate;

Year

Amount

exemption was made on a timely filed

•

Interest due date;

gift tax return. The value of a

1999 . . . . . . . . . . . . . . . . . $1,010,000

•

Principal exchange, if listed on an

testamentary transfer is generally the

2000 . . . . . . . . . . . . . . . . . $1,030,000

exchange; and

estate tax value.

2001 . . . . . . . . . . . . . . . . . $1,060,000

•

CUSIP number.

2002 . . . . . . . . . . . . . . . . . $1,100,000

If the allocation of the exemption to

2003 . . . . . . . . . . . . . . . . . $1,120,000

an inter vivos transfer is not made on a

2004 and 2005 . . . . . . . . . . $1,500,000

If the stock or bond is unlisted, show

timely filed gift tax return, the value for

2006, 2007, and 2008 . . . . . $2,000,000

the company’s principal business office.

purposes of the applicable fraction is

2009 . . . . . . . . . . . . . . . . . $3,500,000

the value of the property transferred at

The CUSIP (Committee on Uniform

the time the allocation is filed with the

For existing trusts, transferors may

Security Identification Procedure)

IRS.

allocate the additional GST exemption

number is a nine-digit number that is

Qualified terminable interest

amount attributable to section 2631(c)

assigned to all stocks and bonds traded

property. For qualified terminable

increases if they otherwise qualify

on major exchanges and many unlisted

interest property (QTIP) that is included

under the existing rules for late

securities. Usually the CUSIP number

in the estate of the surviving spouse of

allocations. For more information, see

is printed on the face of the stock

the settlor because of section 2044,

section 2632 and Multiple transfers into

certificate. If the CUSIP number is not

unless a special QTIP election has

a trust below.

printed on the certificate, it may be

been made under section 2652(a)(3),

Once made, allocations are

obtained through the company’s

the surviving spouse is considered the

irrevocable.

transfer agent.

transferor under section 2652(a) for

Allocation of the GST exemption is

GST purposes, and the value is the

made by the settlor on Form 709,

Other personal property. Any

estate tax value in the estate of the

United States Gift (and Generation-

personal property distributed must be

surviving spouse.

Skipping Transfer) Tax Return, and/or

described in enough detail that the IRS

A special QTIP election allows

Form 706, United States Estate (and

can value it.

property for which a QTIP election was

Generation-Skipping Transfer) Tax

made for estate or gift tax purposes to

Return, by the executor of the settlor’s

Column d. Inclusion Ratio

be treated for GST tax purposes as if

estate. Therefore, you should obtain

this QTIP election had not been made.

Note. The trustee must provide the

information regarding the allocation of

If the special QTIP election has been

inclusion ratio for every distribution.

the exemption to this trust from the

made, the predeceased settlor spouse

settlor or the executor of the settlor’s

is the transferor and the value is that

estate, as applicable.

All distributions, or any part of a

spouse’s estate or gift tax value under

If the settlor’s entire GST exemption

single distribution, that have different

the rules described above. Either the

is not allocated by the due date

inclusion ratios must be listed as

settlor spouse or the executor of the

(including extensions) of the settlor’s

separate items in column a.

settlor spouse’s estate must make the

estate tax return, the exemption is

special QTIP election.

automatically allocated under the rules

The inclusion ratio is the excess of 1

ETIP. If an individual could not

of section 2632.

over the applicable fraction determined

make a timely allocation of exemption

for the trust from which the distribution

Transfers subject to an estate tax

because of an ETIP, the value of the

was made.

inclusion period. If a transferor made

property for the purpose of computing

an inter vivos transfer, and the property

the inclusion ratio is the estate tax

transferred would have been includible

Applicable fraction. The applicable

value if the property is includible in the

in the transferor’s estate if he or she

fraction is a fraction, the numerator of

transferor’s gross estate. If the property

had died immediately after the transfer

which is the amount of the GST

is not includible in the transferor’s gross

(other than by reason of the transferor

exemption allocated to the trust. The

estate, the property is valued at the

dying within 3 years of making the gift),

denominator of the fraction is:

close of the ETIP, provided that the

for purposes of determining the

1. The value of the property

GST exemption is allocated on a timely

inclusion ratio, an allocation of GST

transferred to the trust, minus

filed gift tax return for the calendar year

exemption will only become effective at

2. The sum of:

in which the ETIP closes.

the close of the estate tax inclusion

a. Any federal estate tax or state

period (ETIP).

Multiple transfers into a trust. When

death tax actually recovered from the

a transfer is made to a pre-existing

The value of the property for the

trust attributable to the property and

trust, the applicable fraction must be

purpose of figuring the inclusion ratio is

b. Any charitable deduction allowed

recomputed. The numerator of the new

the estate tax value if the property is

under section 2055 or 2522 with

fraction is the sum of:

included in the transferor’s gross

respect to the property.

estate, or its value at the close of the

1. The exemption allocated to the

ETIP.

current transfer and

2. The nontax portion of the trust

Round the applicable fraction to at

The ETIP closes at the earliest of:

immediately before the current transfer

least the nearest one-thousandth (for

1. The time the transferred property

example, “.001”).

(the product of the applicable fraction

would no longer be includible in the

and the value of all of the property in

settlor’s estate,

the trust immediately before the current

Numerator (GST exemption). Every

2. The date of a generation-

transfer).

individual settlor is allowed a lifetime

skipping transfer of the property, or

GST exemption to be allocated against

3. The date of death of the settlor.

The denominator of the new fraction

property that the individual has

is the sum of:

transferred. For generation-skipping

Denominator (valuation of trust

transfers made through 1998, the

assets). In general, the value to be

1. The value of the current transfer

exemption was $1 million. The GST

used in the applicable fraction is the gift

(minus any federal estate tax or state

exemption amounts for 1999 through

tax value for an inter vivos transfer as

death tax actually paid by the trust

2009 are as follows:

long as the allocation of the GST

attributable to such property) and any

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Form 706-Gs(D-1) - 2007 - Instructions For Skip Person Distributee - Department Of The Treasury - Internal Revenue Service Page 5

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