
From the U.S. Code Online via GPO Access
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[Laws in effect as of January 2, 2001]
[Document not affected by Public Laws enacted between
  January 2, 2001 and January 28, 2002]
[CITE: 26USC2653]

 
                     TITLE 26--INTERNAL REVENUE CODE
 
                    Subtitle B--Estate and Gift Taxes
 
            CHAPTER 13--TAX ON GENERATION-SKIPPING TRANSFERS
 
            Subchapter F--Other Definitions and Special Rules
 
Sec. 2653. Taxation of multiple skips


(a) General rule

    For purposes of this chapter, if--
        (1) there is a generation-skipping transfer of any property, and
        (2) immediately after such transfer such property is held in 
    trust,

for purposes of applying this chapter (other than section 2651) to 
subsequent transfers from the portion of such trust attributable to such 
property, the trust will be treated as if the transferor of such 
property were assigned to the first generation above the highest 
generation of any person who has an interest in such trust immediately 
after the transfer.

(b) Trust retains inclusion ratio

                           (1) In general

        Except as provided in paragraph (2), the provisions of 
    subsection (a) shall not affect the inclusion ratio determined with 
    respect to any trust. Under regulations prescribed by the Secretary, 
    notwithstanding the preceding sentence, proper adjustment shall be 
    made to the inclusion ratio with respect to such trust to take into 
    account any tax under this chapter borne by such trust which is 
    imposed by this chapter on the transfer described in subsection (a).

                (2) Special rule for pour-over trust

        (A) In general

            If the generation-skipping transfer referred to in 
        subsection (a) involves the transfer of property from 1 trust to 
        another trust (hereinafter in this paragraph referred to as the 
        ``pour-over trust''), the inclusion ratio for the pour-over 
        trust shall be determined by treating the nontax portion of such 
        distribution as if it were a part of a GST exemption allocated 
        to such trust.

        (B) Nontax portion

            For purposes of subparagraph (A), the nontax portion of any 
        distribution is the amount of such distribution multiplied by 
        the applicable fraction which applies to such distribution.

(Added Pub. L. 99-514, title XIV, Sec. 1431(a), Oct. 22, 1986, 100 Stat. 
2727.)


                             Effective Date

    Section applicable to generation-skipping transfers (within the 
meaning of section 2611 of this title) made after Oct. 22, 1986, except 
as otherwise provided, see section 1433 of Pub. L. 99-514, set out as a 
note under section 2601 of this title.

                  Section Referred to in Other Sections

    This section is referred to in section 2652 of this title.
