GST Planning for Non-Married Partners in 2010

Non-Married Partners

In a non-married partnership, or same-sex partnership, if
one partner was considerably younger than the other, 2010 may have presented a
unique opportunity for large asset transfers. The older partner, if more than
37.5 years older than the younger partner (making the younger partner a skip
person), would have faced GST taxes on gift transfers to the younger partner in
2009 and prior years. In 2010 with no GST tax, transfers of any value could be
made with only the gift tax, but not the GST tax, due to an issue (cost). The first
million dollars of transfers (assuming no prior use of gift exemption) would be
entirely tax free. Above that amount, only gift tax at the historically low 35%
rate would have been incurred. Practitioners should be alert for the
requirements to file gift tax returns for these client transfers.