GST Tax Simplification Act of 1984

GST Tax Simplification Act of 1984 - Amends the Internal Revenue Code to provide a flat rate of tax on every generation-skipping transfer. Provides that the liability for the tax shall be that of the transferee except in the case of taxable terminations, where the liability will be that of the trustee, or in the case of a direct skip, where the liability will be that of the transferor.

Permits a credit for any generation-skipping transfer tax paid to any State with respect to any property subject to this tax if such transfer occurs at the time of death or as a result of death of an individual.

Defines the terms "generation-skipping transfer," "taxable distributions," "taxable terminations," and "direct skip" for purposes of this Act. Describes the method for determining the taxable amount where there is a taxable distribution, a taxable termination, or a direct skip. Requires that property be valued as of the time of the generation-skipping transfer. Allows for certain instances of alternate valuation.

Allows a special $10,000 per year exemption for certain otherwise taxable distributions from trusts. Establishes rules to be followed to qualify for this special exemption.

Provides for an exemption of up to $1,000,000 for each person making generation-skipping transfers. Allows an individual to apply the exemption to transfers made by his or her spouse or to transfer the exemption to the spouse. Permits the allocation of this exemption at any time up to the due date of an individual's estate tax return.

Provides that the rate of tax on generation-skipping transfers will be 80 percent of the maximum Federal estate tax rate. Establishes rules for the determination of the inclusion ratio to be used to determine the amount of the generation-skipping transfer subject to tax. Sets forth valuation rules for generation-skipping transfers.

Sets forth rules for: (1) assigning individuals to generations for purposes of making the determination of whether a generation-skipping transfer occurs; and (2) adjusting the basis of property transferred in a generation-skipping transfer.

Limits the liability of a trustee for the generation-skipping transfer tax in certain situations.

Directs the Secretary of the Treasury to prescribe by regulations the person required to make the return with respect to the generation-skipping transfer tax and the time for making such return. Requires the Secretary to promulgate regulations to implement the generation-skipping transfer tax.

Permits an income tax deduction for the amount of the generation-skipping transfer taxes imposed on an income distribution. Sets forth special rules for distributions in redemption of stock to pay generation-skipping transfer taxes.

Permits the election of alternate valuation by an estate only if the estate tax and the generation-skipping transfer tax is reduced by the election.

Allows a special adjustment for generation-skipping transfer taxes with respect to the estate tax credit for taxes on prior transfers.

Increases the amount of a gift by the amount of the generation-skipping transfer tax imposed on a direct skip transfer. Permits an extension of time for payment of the generation-skipping transfer tax on direct skip transfers of interests in a closely-held business.