Who is responsible for paying the GST tax on a taxable distribution under GST rules?

Who is responsible for paying the GST tax on a taxable distribution under GST rules?

• A. The transferor
• B. The trustee of the GST trust
• C. The skip person receiving the distribution
• D. The IRS

Answer: (C)

The main idea is that GST tax on a taxable distribution to a skip person is charged to the recipient. When a trust makes a taxable distribution to someone who is in a generation skipped by the transfer, the tax liability attaches to that distribution and is owed by the recipient—the skip person who receives the money or property. The transferor and the trustee aren’t automatically responsible for paying this tax in this scenario, and the IRS is the entity that collects the tax, not the payer in advance. So the correct point to remember is that the skip person receiving the distribution bears the GST tax.

The main idea is that GST tax on a taxable distribution to a skip person is charged to the recipient. When a trust makes a taxable distribution to someone who is in a generation skipped by the transfer, the tax liability attaches to that distribution and is owed by the recipient—the skip person who receives the money or property. The transferor and the trustee aren’t automatically responsible for paying this tax in this scenario, and the IRS is the entity that collects the tax, not the payer in advance. So the correct point to remember is that the skip person receiving the distribution bears the GST tax.