Gift and Estate Tax Basic Exclusion Amount vs. Generation-Skipping Transfer Tax Exemption Amount

Perry made a $12,060,000 taxable gift to his son Ross on 1/1/2022 and a taxable gift of $12,060,000 to Ross's daughter Marilyn on April 30, 2022. Perry made no gifts or generation-skipping transfers before 2022. Note the following:

  • The Basic Exclusion Amount (BEA) in 2022 is $12,060,000,
  • The GST Exemption is the same dollar amount as the BEA by statute,
  • The transfer tax on a taxable transfer of $12,060,000 is $4,769,800 (2022, as indexed) before any credits, exclusions or exemptions, and
  • The gift tax, the estate tax, and the generation-skipping transfer tax are collectively referred to as "transfer taxes."

How much, if any, must Perry pay in transfer taxes on the taxable transfers to Ross and Marilyn in 2022?

  1. $0
  2. $4,769,800
  3. $9,539,600
  4. None of the above