26 U.S.C. § 2651 — Generation assignment

(a) In general.—For this chapter, the generation of every person other than the transferor is determined under this section. (b) Lineal descendants.— (1) In general.—An individual who is a direct descendant of a grandparent of the transferor is assigned to the generation determined by comparing two numbers: the number of generations between that grandparent and the individual, and the number of generations between that grandparent and the transferor. (2) On spouse’s side.—An individual who is a direct descendant of a grandparent of the transferor’s spouse or former spouse, other than that spouse, is assigned to the generation determined by comparing the generations between that grandparent and the individual with the generations between that grandparent and the spouse. (3) Treatment of legal adoptions, etc.—For this subsection: (A) Legal adoptions.—A legal-adoption relationship is treated like a blood relationship. (B) Relationships by half-blood.—A half-blood relationship is treated like a whole-blood relationship. (c) Marital relationship.— (1) Marriage to transferor.—An individual who was married to the transferor at any time is assigned to the transferor’s generation. (2) Marriage to other lineal descendants.—An individual who was married at any time to an individual described in subsection (b) is assigned to that described individual’s generation. (d) Persons who are not lineal descendants.—An individual not assigned to a generation by the earlier rules is assigned based on the individual’s birth date as follows: (1) A person born no more than 12½ years after the transferor was born is assigned to the transferor’s generation. (2) A person born more than 12½ years but no more than 37½ years after the transferor was born is assigned to the first generation younger than the transferor. (3) Similar rules apply to create each new generation every 25 years. (e) Special rule for persons with a deceased parent.— (1) In general.—To decide whether a transfer is a generation-skipping transfer, this rule applies when: (A) an individual is descended from a parent of the transferor, or from a parent of the transferor’s spouse or former spouse; and (B) the individual’s parent, who is a direct descendant of that parent, is dead when the transfer that establishes or produces the individual’s interest becomes subject to a tax under chapter 11 or 12 on the transferor. If there is more than one such time, use the earliest one. The individual is treated as a member of the generation one generation below the lower of these two generations: the transferor’s generation, or the generation assigned to the individual’s youngest living ancestor who is also descended from the relevant parent of the transferor, spouse, or former spouse. The generation assignment of each descendant of that individual is adjusted in the same way. (2) Limited application of subsection to collateral heirs.—This subsection does not apply to a transfer to an individual who is not a direct descendant of the transferor, spouse, or former spouse if the transferor has any living direct descendant when the transfer occurs. (f) Other special rules.— (1) Individuals assigned to more than one generation.—Unless regulations provide otherwise, an individual who would otherwise be assigned to more than one generation is assigned to the youngest of those generations. (2) Interests through entities.—Except as provided in paragraph (3), if an estate, trust, partnership, corporation, or other entity has an interest in property, each person with a beneficial interest in the entity is treated as having an interest in the property and is assigned to a generation under the earlier rules of this subsection. (3) Treatment of certain charitable organizations and governmental entities.—Each of the following is assigned to the transferor’s generation: (A) an organization described in 26 U.S.C. § 511(a)(2); (B) a charitable trust described in 26 U.S.C. § 511(b)(2); and (C) a governmental entity.