Estate, Gift, and Generation-Skipping Taxes

How do estate, gift, and generation-skipping taxes shape decisions about transferring wealth?

Estate, Gift, and Generation-Skipping Taxes (formerly Foundations of Tax Module 2) introduces the U.S. wealth transfer taxation system, including estate tax, gift tax, and generation-skipping transfer tax. Learners explore how these taxes developed, how they are calculated, and why they matter even though they represent a small share of federal revenue. The module also examines the practical and emotional burden placed on heirs when estates are not organized, as well as planning strategies that may reduce tax exposure, preserve liquidity, and support clearer transfer intentions. The emphasis is on helping learners connect tax concepts to real decisions about timing, documentation, asset selection, advisor engagement, and family preparedness.

What You’ll Be Able to Do on the Other Side

• Distinguish among estate tax, gift tax, and generation-skipping transfer tax so that you can recognize which transfer events may create tax exposure during life, at death, or across generations.
• Interpret the basic steps in a federal estate tax calculation so that you can better understand how gross estate value, deductions, lifetime gifts, credits, and exemptions affect potential tax liability.
• Evaluate common estate tax reduction strategies so that you can ask more informed questions about lifetime gifting, trusts, charitable planning, liquidity, and asset transfer timing.
• Compare lifetime gifting with transfers at death so that you can recognize how basis rules, appreciation, control, and capital gains consequences may affect planning choices.
• Identify documentation and decision gaps that can burden heirs so that you can better appreciate the importance of organized records, clear bequests, accessible information, and communicated intentions.

The Experience

This module combines self-paced reading, historical context, tax calculation walkthroughs, case studies, applied examples, and reflection prompts. The experience includes practical planning scenarios, including the burden on heirs when estates are not in order, Joe and Sandy Green’s estate tax planning case, the Wilson family gift-versus-estate tax case, and examples involving Crummey powers, trust gifts, annual exclusions, and lifetime exemptions. Learners are prompted to connect tax planning to family priorities, liquidity needs, beneficiary impact, advisor conversations, and the reminder not to let the “tax tail wag the dog.”

Prerequisites: Module 1 - Introduction to Taxes - Recommended  

Estimated Completion Time: 1 hour

Featured Resources:      

• Don't Leave a Mess by Sandra Pollack
• Estate & Trust Administration for Dummies, 2nd ed by Margaret Atkins Munro,EA & Kathryn A. Murphy, Esq
• Form 709 Department of the Treasury Internal Revenue Service
• "When a QPRT is Not a Qualified Place to Park Your Residence" by Amiel Z. Weinstock
• "Do I Really Have to Send These Crummey Notices?" by David Gonzales