2019 GST Exemption
For 2019, the GST Exemption figures are $11,400,000 (Lifetime GST exemption) and 40% (Top GST tax rate).
Effective 2019-01-01Source: 2019 Instructions for Form 709 (IRS)Verified 2026-09-03
Compared with 2018
| Item | 2018 | 2019 | Change |
|---|---|---|---|
| Lifetime GST exemption | $11,180,000 | $11,400,000 | +$220,000 (+2.0%) |
| Top GST tax rate | 40% | 40% | +0% (+0.0%) |
Who it applies to
Donors making generation-skipping transfers during 2019 or allocating GST exemption on a 2019 gift-tax return
What changed this year, and why
The lifetime GST exemption for 2019 is $11,400,000 per donor, as published by the IRS on Form 709 instructions.
Common questions
- What is the GST exemption?
- It is a lifetime exemption that shields transfers from the federal generation-skipping transfer (GST) tax, which applies when property passes to a beneficiary more than one generation below the transferor, such as a grandchild.
- Is the GST exemption the same as the estate and gift tax exclusion?
- Yes. The $11,400,000 GST exemption for 2019 matches the basic estate and gift tax exclusion for 2019, so the same lifetime total applies to all three taxes.
Which transfers the GST tax reaches
The GST tax applies only to inter vivos direct skips - transfers made during the donor's lifetime that meet all three conditions: they must be subject to the gift tax (meaning they are required to be listed on Schedule A of Form 709), they must involve an interest in property, and they must be made to a skip person (a beneficiary two or more generations below the donor, such as a grandchild). Transfers that do not meet every one of these requirements fall outside the GST tax. Importantly, certain transfers that would otherwise be reportable on Schedule A are specifically excluded from the GST tax, including gifts to political organizations, gifts to qualifying exempt organizations, transfers that qualify for the medical or educational exclusions, transfers fully covered by the annual exclusion, and most transfers to a spouse. The lifetime GST exemption for 2019 is $11,400,000, which a donor may allocate against these taxable transfers to shield them from the tax.
You must report on Form 709 the GST tax imposed on inter vivos direct skips. An inter vivos direct skip is a transfer made during the donor's lifetime that is: • Subject to the gift tax, • Of an interest in property, and • Made to a skip person.
2019 Instructions for Form 709 (IRS)
The exemption allocates itself to direct skips unless you elect out
When a donor makes an inter vivos direct skip - a lifetime transfer to a skip person - the IRS does not wait for the donor to decide how much GST exemption to use. Instead, a portion of the donor's unused exemption is placed on the transferred property automatically. For 2019 the lifetime GST exemption is $11,400,000, and any part of that amount that has not already been applied is available to shelter the direct skip. A donor who does not want the exemption to attach to the transfer may elect out, but the election must be made affirmatively. To do so, the donor files Form 709 and attaches a statement that clearly describes the transaction and states the extent to which the automatic allocation should not apply. Simply reporting the direct skip on a timely filed return and paying any GST tax due also blocks the automatic allocation, so the exemption remains available to use on other transfers.
In the case of inter vivos direct skips, a portion of the donor's unused exemption is automatically allocated to the transferred property unless the donor elects otherwise. To elect out of the automatic allocation of exemption, you must file Form 709 and attach a statement to it clearly describing the transaction and the extent to which the automatic allocation is not to apply.
2019 Instructions for Form 709 (IRS)
Allocating the exemption is a one-way decision
Once a donor assigns part of the lifetime GST exemption - $11,400,000 for 2019 - to a particular transfer, that assignment cannot be undone. The donor cannot later reclaim the exemption for use on another transfer, and cannot shift it to a different trust or beneficiary. This is true whether the allocation happens because the donor chose it on Form 709, because the exemption was applied automatically to an inter vivos direct skip, or because the executor applied the exemption on the estate tax return for transfers taking effect at death. Because the decision is permanent, the donor (or executor) needs to think carefully about which transfers receive the exemption and how much each receives. Planning is important: using exemption on a transfer that would have been GST-tax-free anyway wastes shelter that could have protected a taxable transfer later.
The donor can apply this exemption to inter vivos transfers (that is, transfers made during the donor's life) on Form 709. The executor can apply the exemption on Form 706 to transfers taking effect at death. An allocation is irrevocable.
2019 Instructions for Form 709 (IRS)
Allocating to a transfer not reported on this return
The allocation section of Form 709 is designed to handle transfers reported on the same return, but a donor may also want to apply GST exemption to transfers that were made in earlier years or that appear on a different return. The instructions provide a way to do this. The donor attaches a statement to the current Form 709 and titles it "Notice of Allocation." The notice must identify each trust or other transfer clearly, including the trust's employer identification number if it is known. For a late allocation, the notice must also state the year the original transfer was reported on Form 709, give the value of the trust assets at the effective date of the allocation, and specify the amount of GST exemption being allocated to each gift (or state that no exemption is being allocated). This procedure is the mechanism for making late allocations - allocations filed after the due date of the return for the year the transfer was made - and for applying exemption to transfers that do not appear on the current return at all.
Notice of allocation. You may wish to allocate GST exemption to transfers not reported on this return, such as a late allocation. To allocate your exemption to such transfers, attach a statement to this Form 709 and entitle it “Notice of Allocation.”
2019 Instructions for Form 709 (IRS)
A higher exemption in a later year does not reach back to cover an earlier transfer
For 2019, the federal lifetime GST exemption is $11,400,000, but this higher amount cannot be used to retroactively shelter earlier transfers. The IRS instructions make clear that each annual increase in the exemption can only be allocated to transfers made, or appreciation occurring, during or after the year the increase takes effect. This means a donor who made generation-skipping transfers in prior years - when the exemption was lower - cannot go back and allocate the 2019 exemption of $11,400,000 to those earlier gifts. The 2019 exemption applies only to transfers made in 2019 or later years. This forward-looking rule prevents taxpayers from using a temporarily high exemption amount to cover transfers that occurred when the exemption was much smaller, ensuring that exemption allocations are tied to the amount available in the year the transfer was actually made.
In general, each annual increase can only be allocated to transfers made (or appreciation occurring) during or after the year of the increase.
2019 Instructions for Form 709 (IRS)
Unused exemption does not just sit there, it gets allocated automatically
Under federal law, the 2019 GST exemption of $11,400,000 does not simply remain idle when a donor does not affirmatively allocate it to a specific transfer. In the case of inter vivos direct skips - transfers made during life that skip a generation - a portion of the donor's unused exemption is automatically allocated to the transferred property unless the donor elects otherwise. This means that if a donor makes a direct skip to a skip person (such as a grandchild) without specifically allocating exemption on Form 709, the IRS will automatically apply whatever exemption remains to that transfer. The donor may elect out of this automatic allocation by filing Form 709 and attaching a statement clearly describing the transaction and the extent to which the automatic allocation is not to apply. Alternatively, reporting the direct skip on a timely filed Form 709 and paying the GST tax on the transfer will prevent the automatic allocation. This rule ensures that exemption is not wasted through inattention, but it also gives the donor control to override the automatic allocation when other planning considerations apply.
In the case of inter vivos direct skips, a portion of the donor's unused exemption is automatically allocated to the transferred property unless the donor elects otherwise.
2019 Instructions for Form 709 (IRS)
A gift under the annual exclusion is not automatically safe from GST tax
A gift that falls within the $15,000 annual exclusion is not automatically safe from the federal GST tax. Certain transfers, particularly transfers to a trust, that are not subject to gift tax and are therefore not subject to the GST tax on Form 709 may still be subject to the GST tax at a later date. This rule applies even if the transfer is less than the $15,000 annual exclusion. For example, a donor who contributes an amount fully covered by the annual exclusion to a trust for the benefit of a skip person has made a transfer that owes no gift tax, but that same transfer may later become subject to GST tax when distributions are made from the trust to skip persons. The donor may choose to apply some or all of the $11,400,000 lifetime exemption to the transfer on the gift tax return or on a Notice of Allocation, but if no exemption is allocated, the transfer retains its potential GST tax exposure. This means the annual exclusion shelters a gift from gift tax but does not necessarily shelter it from the separate generation-skipping transfer tax, and donors who make annual-exclusion gifts to trusts should consider whether to allocate exemption to those transfers.
Certain transfers, particularly transfers to a trust, that are not subject to gift tax and are therefore not subject to the GST tax on Form 709 may be subject to the GST tax at a later date. This is true even if the transfer is less than the $15,000 annual exclusion.
2019 Instructions for Form 709 (IRS)
How each figure was verified
Each number below was read from a stored copy of the document named beside it, and checked to occur word for word in the quoted sentence. The digest is of that stored text.
2019 Instructions for Form 709 (IRS)
- Lifetime GST exemption
Every donor is allowed a lifetime GST exemption. The amount of the exemption for 2019 is $11,400,000.
- Top GST tax rate
The top rate for gifts and generation- skipping transfers remains at 40%.