IRS written determination 202640005

Private letter rulings and published taxpayer determination letters. Native document type is retained separately; a determination letter is not labeled a private letter ruling. These taxpayer-specific releases cannot be used or cited as precedent under 26 USC 6110(k)(3); applicability and current legal force are not independently certified. Keep repeated UILC subjects attached to one actual numbered document.

Internal Revenue Service
Department of the Treasury
Washington, DC 20224
Number: 202640005
Release Date: 10/2/2026
Index Number: 2642.07-00

---------------------
----------------------------
-----------------------

------------------------------

------------------------------------------------

Third Party Communication: None
Date of Communication: Not Applicable
Person To Contact:
-------------------------, ID No. -----------------
-----------------------------------------------------
Telephone Number:
--------------------
Refer Reply To:
CC:PT&E:B04
PLR-105104-26
Date:
June 30, 2026

Legend

Donor
Spouse
Date 1
Date 2
Year 1
Year 2
Trust

Attorney
Accountant 1
Accountant 2
a
=
=
=
=
=
=
=

=
=
=
=
-------------------------------------------------------------
-----------------------------------------------
------------------
------------------
-------
-------
---------------------------------------------------------------
----------------------
----------------------------
--------------------------
------------------------------
--------------

Dear ---------------:

This letter responds to your authorized representative’s letter dated
December 30, 2025, and subsequent correspondence, requesting an extension of time
under § 2642(g) of the Internal Revenue Code and § 26.2642-7 of the
Generation-Skipping Transfer (GST) Tax Regulations to allocate GST exemption to a
transfer to a trust.

The facts and representations submitted are as follows:

In Year 1, Donor engaged Attorney for estate planning advice, including
preparation of Trust. On Date 1, in Year 1, Donor created Trust, an irrevocable trust.
The primary purpose of Trust was to benefit Donor’s descendants. Trust has GST
potential.

PLR-105104-26

2
On Date 2, in Year 1, Donor transferred to Trust $a in assets held in investment
accounts. Donor and Spouse engaged Accountant 1 to prepare and file their respective
Year 1 Forms 709 (United States Gift (and Generation-Skipping Transfer) Tax Returns).
On their respective Year 1 Forms 709, Donor and Spouse consented to treat Year 1
gifts as being made one-half by each spouse pursuant to § 2513. Donor informed
Accountant 1 that the primary purpose of Trust was to benefit future generations.
Accountant 1 prepared Donor’s and Spouse’s Year 1 Forms 709, and on each return,
mistakenly made the election under § 2632(c)(5) to opt out of the automatic allocation of
GST exemption. Accordingly, Donor and Spouse failed to allocate GST exemption to
the Year 1 transfer.

In Year 2, Donor and Spouse retained a new accountant, Accountant 2. In
Year 2, Accountant 2 and Attorney discovered the mistaken election to opt out of the
automatic allocation of GST exemption that Accountant 1 made on Donor’s and
Spouse’s Year 1 Forms 709.

Spouse represents that no distributions have been made from Trust. Spouse also
represents that prior to Year 1, Spouse did not make any gifts that were subject to GST
tax and that Spouse had sufficient GST exemption available to allocate to the portion of
the Year 1 transfer to Trust attributable to Spouse.

Spouse requests an extension of time to allocate GST exemption to the portion
of the Year 1 transfer to Trust attributable to Spouse.

LAW AND ANALYSIS

Section 2513(a)(1) provides, generally, that a gift made by one spouse to any
person other than the donor's spouse is considered for purposes of the gift tax as made
one-half by the donor and one-half by the donor's spouse, but only if at the time of the
gift each spouse is a citizen or resident of the United States.

Section 25.2513-1(b)(4) of the Gift Tax Regulations provides that the consent is
effective only if both spouses signify their consent to treat all gifts made to third parties
during that calendar period by both spouses while married to each other as having been
made one-half by each spouse. Such consent, if signified with respect to any calendar
period, is effective with respect to all gifts made to third parties during such calendar
period except, in part, if one spouse transferred property in part to his or her spouse and
in part to third parties, the consent is effective with respect to the interest transferred to
third parties only insofar as such interest is ascertainable at the time of the gift and
severable from the interest transferred to his or her spouse.

Section 2601 imposes a tax on every generation-skipping transfer. A
generation-skipping transfer is defined under § 2611(a) as (1) a taxable distribution,
(2) a taxable termination, and (3) a direct skip.

PLR-105104-26

3
Section 2602 provides that the amount of the tax imposed by § 2601 is the
taxable amount multiplied by the applicable rate.

Section 2631(a) provides that, for purposes of determining the inclusion ratio,
every individual shall be allowed a GST exemption which may be allocated by such
individual (or his executor) to any property with respect to which such individual is the
transferor. Section 2631(b) provides that any allocation under § 2631(a), once made,
shall be irrevocable.

Section 2632(a)(1) provides that an individual’s GST exemption may be allocated
at any time on or before the date prescribed for filing the estate tax return for such
individual’s estate (determined with regard to extensions), regardless of whether such
return is required to be filed. Section 2632(a)(2) provides that the manner in which
allocations are to be made shall be prescribed by forms or regulations issued by the
Secretary.

Section 2632(c)(1) provides that if any individual makes an indirect skip during
such individual’s lifetime, any unused portion of such individual’s GST exemption shall
be allocated to the property transferred to the extent necessary to make the inclusion
ratio for such property zero. If the amount of the indirect skip exceeds such unused
portion, the entire unused portion shall be allocated to the property transferred.

Section 2632(c)(3)(A) provides that for purposes of this subsection, the term
“indirect skip” means any transfer of property (other than a direct skip) subject to the tax
imposed by chapter 12 made to a GST trust.

Section 2632(c)(3)(B)(iv) provides that the term “GST trust” means a trust that
could have a generation-skipping transfer with respect to the transferor unless the trust
is a trust any portion of which would be included in the gross estate of a non-skip
person (other than the transferor) if such person died immediately after the transfer. The
value of transferred property shall not be considered to be includible in the gross estate
of a non-skip person or subject to a right of withdrawal by reason of such person holding
a right to withdraw so much of such property as does not exceed the amount referred to
in § 2503(b) with respect to any transferor.

Section 2632(c)(5)(A)(i) provides that an individual may elect to have the
automatic allocation rules not apply to (I) an indirect skip, or (II) any or all transfers
made by such individual to a particular trust.

Section 2632(c)(5)(A)(ii) provides that any individual may elect to treat any trust
as a GST trust for purposes of this subsection with respect to any or all transfers made
by such individual to such trust.

Section 2642(a)(1) provides that the inclusion ratio with respect to any property
transferred in a generation-skipping transfer is the excess (if any) of one over the

PLR-105104-26

4
“applicable fraction.” Under 2642(a)(1), the applicable fraction is defined as a fraction
the numerator of which is the amount of the GST exemption allocated to the trust (or to
property transferred in a direct skip), and the denominator of which is the value of the
property transferred to the trust (or involved in the direct skip), reduced by the sum of
any federal estate tax or state death tax actually recovered from the trust attributable to
such property and any charitable deduction allowed under § 2055 or 2522 with respect
to such property.

Section 2642(b)(1)(A) provides that, except as provided in § 2642(f), if the
allocation of the GST exemption to any transfers of property is made on a gift tax return
filed on or before the date prescribed by § 6075(b) for such transfer or is deemed to be
made under § 2632(b)(1) or (c)(1), the value of such property for purposes of § 2642(a)
shall be its value as finally determined for purposes of chapter 12 (within the meaning of
§ 2001(f)(2)), or, in the case of an allocation deemed to have been made at the close of
an estate tax inclusion period, its value at the time of the close of the estate tax
inclusion period.

Section 2642(g)(1)(A) provides that the Secretary shall by regulation prescribe
such circumstances and procedures under which extensions of time will be granted to
make an allocation of GST exemption described in § 2642(b)(1) or (2), and an election
under § 2632(b)(3) or (c)(5). Such regulations shall include procedures for requesting
comparable relief with respect to transfers made before the date of the enactment of
§ 2642(g).

Section 2642(g)(1)(B) provides that in determining whether to grant relief under
this paragraph, the Secretary shall take into account all relevant circumstances,
including evidence of intent contained in the trust instrument or instrument of transfer
and such other factors as the Secretary deems relevant. For purposes of determining
whether to grant relief under this paragraph, the time for making the allocation (or
election) shall be treated as if not expressly prescribed by statute.

Section 26.2642-7 of the Generation-Skipping Transfer Tax Regulations sets
forth the procedures for requesting an extension of time to make an allocation of GST
exemption described in § 2642(b)(1) or (2), and an election under § 2632(b)(3) or (c)(5),
and the standards used to determine whether relief may be granted.

Section 26.2642-7(d)(1) provides that requests for relief will be granted when and
to the extent that the transferor or the executor of the transferor’s estate provides
evidence establishing to the satisfaction of the Internal Revenue Service that the
transferor or the executor of the transferor’s estate acted reasonably and in good faith,
and that the grant of relief will not prejudice the interests of the government.

Section 26.2642-7(d)(2) provides a nonexclusive list of factors that will be
considered in determining whether the transferor or the executor of the transferor’s
estate acted reasonably and in good faith for purposes of § 26.2642-7, including: (i) the

PLR-105104-26

5
intent of the transferor to timely allocate GST exemption to a transfer or to timely make
an election under § 2632(b)(3) or (c)(5); (ii) intervening events beyond the control of the
transferor that caused the failure to allocate GST exemption to a transfer or to make an
election under § 2632(b)(3) or (c)(5); (iii) lack of awareness, despite the exercise of
reasonable diligence, by the transferor or the executor of the transferor’s estate, taking
into account the experience of the transferor or the executor of the transferor’s estate
and the complexity of the GST tax issue, as the cause of the failure to allocate GST
exemption to a transfer or to make an election under § 2632(b)(3) or (c)(5); (iv)
consistency by the transferor with regard to the allocation of the transferor’s GST
exemption to one or more trusts or skip persons; and (v) reasonable reliance by the
transferor or the executor of the transferor’s estate on the advice of a qualified tax
professional.

Section 26.2642-7(d)(3) provides a nonexclusive list of factors that will be
considered to determine whether the interests of the government would be prejudiced
for purposes of § 26.2642-7, including: (i) an attempt to benefit from hindsight; (ii) the
timing of the request for relief, including any delay by the transferor or the executor of
the transferor’s estate in the filing of the request for relief that was intended to deprive
the Internal Revenue Service of a sufficient period of time in which to challenge any
element of the transfer that is the subject of the request for relief; (iii) the occurrence
and effect of an intervening taxable termination or taxable distribution between the time
for making a timely allocation of GST exemption or a timely election described in
§ 2632(b)(3) or (c)(5) and the time at which the request for relief was filed; and (iv)
certain circumstances involving the expiration of a period of limitations on the
assessment or collection of transfer taxes.

Based on the facts submitted and the representations made, we conclude that
the requirements of § 26.2642-7 have been satisfied. Therefore, Spouse is granted an
extension of time of 120 days from the date of this letter to allocate Spouse’s GST
exemption to the portion of the Year 1 transfer to Trust attributable to Spouse.

The allocation of GST exemption should be made on an amended Form 709 for
Year. The Form 709 should be filed with the Internal Revenue Service at the following
address: Internal Revenue Service Center, ATTN: E&G, Stop 824G, 7940 Kentucky
Drive, Florence, KY 41042-2915.

In accordance with the Power of Attorney on file with this office, we have sent a
copy of this letter to your authorized representative.

Except as expressly provided herein, we neither express nor imply any opinion
concerning the tax consequences of any aspect of any transaction or item discussed or
referenced in this letter.

The rulings contained in this letter are based upon information and
representations submitted by the taxpayer and accompanied by a penalty of perjury

PLR-105104-26

6
statement executed by an appropriate party. While this office has not verified any of the
material submitted in support of the request for rulings, it is subject to verification on
examination.

This ruling is directed only to the taxpayer requesting it. Section 6110(k)(3) of
the Code provides that it may not be used or cited as precedent.

Sincerely,

Melissa C. Liquerman
_______________________________
[Melissa C. Liquerman]
Senior Counsel, Branch 4
Office of the Associate Chief Counsel
(Passthroughs, Trusts, and Estates)

Enclosure
Copy for § 6110 purposes

cc:

cc:

--------------------
-------------------------------------------
------------------------
---------------------------

------------------------------------------------------------
-----------------------------------