Section 2611. Generation-skipping transfer defined (a) In general

-For   purposes   of   this   chapter,   the   term  "generation-skipping transfer" means-
    (1) a taxable distribution,
    (2) a taxable termination, and
    (3) a direct skip.
    (b)   Certain   transfers   excluded.-The   term  "generation-skipping
  transfer" does not include-
    (1) any transfer which, if made inter vivos by  an  individual,  would
  not  be treated as a taxable gift by reason of section 2503(e) (relating
  to exclusion of certain transfers for educational or medical  expenses),
  and
    (2) any transfer to the extent-
    (A)  the property transferred was subject to a prior tax imposed under
  this chapter,
    (B) the transferee in the prior transfer  was  assigned  to  the  same
  generation  as (or a lower generation than) the generation assignment of
  the transferee in this transfer, and
    (C) such transfers do not have the effect of avoiding tax  under  this
  chapter with respect to any transfer.