2024 GST Exemption
For 2024, the GST Exemption figures are $13,610,000 (Lifetime GST exemption) and 40% (Top GST tax rate).
Effective 2024-01-01Source: 2024 Instructions for Form 709 (IRS)Verified 2026-09-03
Compared with 2023
| Item | 2023 | 2024 | Change |
|---|---|---|---|
| Lifetime GST exemption | $12,920,000 | $13,610,000 | +$690,000 (+5.3%) |
| Top GST tax rate | 40% | 40% | +0% (+0.0%) |
Who it applies to
Donors who make generation-skipping transfers (transfers to skip persons such as grandchildren) and must file IRS Form 709 to report those transfers or to allocate their lifetime GST exemption.
What changed this year, and why
The lifetime GST exemption for 2024 is $13,610,000, up from $12,920,000 in 2023. The exemption is indexed annually for inflation and applies to generation-skipping transfers reported on IRS Form 709.
Common questions
- What is the GST exemption used for?
- The lifetime GST exemption is a federal tax exemption that shields a certain amount of property transferred to a skip person (such as a grandchild) from the generation-skipping transfer tax. It is reported on IRS Form 709, Schedule D.
- Is the GST exemption portable between spouses?
- No. The lifetime GST exemption is the same for every donor regardless of marital status. Unlike the gift and estate tax exclusion, it cannot be shared or transferred between spouses.
Every amount on this page is a published figure rather than yours. The GST exemption headroom takes the number you enter and works it out against them, showing which published figure it used.
Which transfers the GST tax reaches
The generation-skipping transfer (GST) tax on Form 709 applies only to inter vivos direct skips. An inter vivos direct skip is a transfer made during the donor's lifetime that meets all three of the following requirements: it must be subject to the gift tax, it must be of an interest in property, and it must be made to a skip person. A transfer qualifies as subject to the gift tax only if it is required to be reported on Schedule A of Form 709 under the gift tax rules in the instructions, including the split gift rules. Certain transfers are therefore not subject to the GST tax at all - these include transfers to political organizations, transfers to certain exempt organizations, transfers that qualify for the medical or educational exclusions, transfers that are fully excluded under the annual exclusion, and most transfers made to a spouse. All three requirements must be satisfied before a gift is subject to the GST tax.
The GST tax you must report on Form 709 is that imposed only on inter vivos direct skips. An inter vivos direct skip is a transfer that is: • Subject to the gift tax, • Of an interest in property, and • Made to a skip person. All three requirements must be met before the gift is subject to the GST tax.
2024 Instructions for Form 709 (IRS)
The exemption allocates itself to direct skips unless you elect out
For federal GST tax purposes in 2024, when a donor makes an inter vivos direct skip (a gift subject to both gift and GST tax that skips a generation, such as a transfer to a grandchild), the IRS automatically applies part of the donor's unused $13,610,000 lifetime GST exemption to that transferred property. This automatic allocation happens by operation of law unless the donor affirmatively elects out of it. To prevent the automatic allocation, the donor must file a timely Form 709 (the federal gift tax return) for the year of the transfer and attach a statement that clearly describes the transaction and states 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 due on the transfer also blocks the automatic allocation. This rule matters because the lifetime GST exemption is a limited resource. If a donor wants to preserve exemption for later, larger generation-skipping transfers, electing out of the automatic allocation on smaller early transfers lets the donor keep that $13,610,000 available for use where it is more valuable.
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. Reporting a direct skip on a timely filed Form 709 and paying the GST tax on the transfer will prevent an automatic allocation.
2024 Instructions for Form 709 (IRS)
Allocating the exemption is a one-way decision
Once you allocate GST exemption to a transfer, that decision cannot be undone. The donor can apply this exemption to inter vivos transfers on Form 709, and the executor can apply the exemption on Form 706 to transfers taking effect at death. Once made, the allocation is final. This means you should carefully consider how much of your $13,610,000 lifetime GST exemption to allocate to each transfer, as you cannot reallocate it later if circumstances change or if you determine a different allocation would have been more advantageous.
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.
2024 Instructions for Form 709 (IRS)
Allocating to a transfer not reported on this return
A gift tax return reports the gifts you made this year, but your exemption does not have to follow the same calendar. Where you want it to cover something the return does not report, typically a transfer from an earlier year you left unsheltered, you say so in a statement of your own that you attach to the return and head Notice of Allocation. It has to be specific enough that the allocation can be tied to one trust and one amount, so it identifies the trust and gives its EIN where you know it, names the earlier year for a late allocation, states what the trust assets were worth on the day the allocation takes effect, says how much exemption each gift gets, and gives the inclusion ratio the trust ends up with. That last figure is the point of the exercise: a ratio of zero means the trust is fully sheltered and later distributions to grandchildren escape the tax entirely, while a partial allocation leaves a slice of every future distribution exposed to it. The exemption amount need not be written as a number at all, since a formula asking for whatever it takes to reach a ratio of zero does the arithmetic for you. And because the valuation date is the day the allocation is effective rather than the day of the gift, a trust that has grown in the meantime absorbs more of the $13,610,000 you have to spend.
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.” The notice must contain the following for each trust (or other transfer). • Clear identification of the trust, including the trust's EIN, if known. • If this is a late allocation, the year the transfer was reported on Form 709. • The value of the trust assets at the effective date of the allocation. • The amount of your GST exemption allocated to each gift (or a statement that you are allocating exemption by means of a formula such as “an amount necessary to produce an inclusion ratio of zero”). • The inclusion ratio of the trust after the allocation.
2024 Instructions for Form 709 (IRS)
A donor uses it during life, an executor uses it at death
The lifetime GST exemption is applied through two separate channels depending on when the transfer takes place. A donor can apply this exemption to inter vivos transfers - that is, transfers made during the donor's life - by reporting the allocation on Form 709. An executor can apply the exemption on Form 706 to transfers taking effect at death. The 2024 lifetime GST exemption is $13,610,000. Once an allocation is made under either form, it is irrevocable; the exemption cannot be redirected to a different transfer or trust. Because the exemption is indexed for inflation and the amount can change from year to year, the IRS instructs taxpayers to keep a record of their transfers and allocations to ensure that any future increases in the exemption are applied to the correct transfers.
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.
2024 Instructions for Form 709 (IRS)
A higher exemption in a later year does not reach back to cover an earlier transfer
The GST exemption is indexed for inflation, so it increases from year to year. However, each annual increase can only be allocated to transfers made (or appreciation occurring) during or after the year of the increase. This means a higher exemption in a later year does not reach back to cover an earlier transfer. For example, if a donor made taxable GSTs in earlier years when the exemption was lower and allocated all available exemption to those transfers, the increase to $13,610,000 in 2024 cannot be used to shield those prior transfers. The 2024 increase can only be applied to transfers made in 2024 or later years, or to appreciation in existing trusts that occurs in 2024 or after. Taxpayers must keep records of their transfers and allocations to ensure that any future increases in the exemption are applied correctly.
In general, each annual increase can only be allocated to transfers made (or appreciation occurring) during or after the year of the increase.
2024 Instructions for Form 709 (IRS)
Unused exemption does not just sit there, it gets allocated automatically
This rule applies specifically to direct skips made during the donor's lifetime. To elect out of the automatic allocation of exemption, the donor must file Form 709 and attach a statement clearly describing the transaction and the extent to which the automatic allocation is not to apply. Reporting a direct skip on a timely filed Form 709 and paying the GST tax on the transfer will also prevent an automatic allocation. The 2024 lifetime GST exemption is $13,610,000, and any unused portion may be automatically applied to direct skips under this rule.
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.
2024 Instructions for Form 709 (IRS)
A gift under the annual exclusion is not automatically safe from GST tax
This is true even if the transfer is less than the $18,000 annual exclusion. In this instance, you may want to apply a GST exemption amount to the transfer on this return or on a Notice of Allocation. However, you should be aware that a GST exemption may be automatically allocated to the gift if the trust that receives the gift is a "GST trust" (as defined under section 2632(c)). A gift under the annual exclusion is not automatically safe from GST tax; it may still be subject to the GST tax at a later date if the trust is not structured as a GST trust or if the automatic allocation does not apply. The 2024 lifetime GST exemption is $13,610,000.
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 $18,000 annual exclusion.
2024 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.
2024 Instructions for Form 709 (IRS)
- Lifetime GST exemption
Every donor is allowed a lifetime GST exemption. The amount of the exemption for 2024 is $13,610,000.
- Top GST tax rate
The top rate for gifts and generation-skipping transfers remains at 40%.