Section 2651. Generation assignment (a) In general

-For purposes of this chapter, the generation to which  any person (other than the transferor) belongs shall  be  determined  in
  accordance with the rules set forth in this section.
    (b) Lineal descendants.-
    (1)  In  general.-An  individual  who  is  a  lineal  descendant  of a
  grandparent of the transferor shall be assigned to that generation which
  results from comparing the number of generations between the grandparent
  and  such  individual  with  the  number  of  generations  between   the
  grandparent and the transferor.
    (2)  On  spouse's  side.-An individual who is a lineal descendant of a
  grandparent of a spouse (or former spouse) of the transferor (other than
  such spouse) shall be assigned to that  generation  which  results  from
  comparing  the  number  of generations between such grandparent and such
  individual with the number of generations between such  grandparent  and
  such spouse.
    (3)   Treatment   of   legal  adoptions,  etc.-For  purposes  of  this
  subsection-
    (A) Legal adoptions.-A relationship by legal adoption shall be treated
  as a relationship by blood.
    (B) Relationships by  half-blood.-A  relationship  by  the  half-blood
  shall be treated as a relationship of the whole-blood.
    (c) Marital relationship.-
    (1)  Marriage to transferor.-An individual who has been married at any
  time to the transferor shall be assigned to the transferor's generation.
    (2) Marriage to other lineal descendants.-An individual who  has  been
  married  at  any time to an individual described in subsection (b) shall
  be assigned to the generation of the individual so described.
    (d) Persons who are not lineal descendants.-An individual who  is  not
  assigned  to  a generation by reason of the foregoing provisions of this
  section shall be assigned to a generation on the basis of  the  date  of
  such individual's birth with-
    (1)  an  individual  born not more than 12 1/2 years after the date of
  the birth of the transferor assigned to the transferor's generation,
    (2) an individual born more than 12 1/2 years but not more than 37 1/2
  years after the date of the birth of  the  transferor  assigned  to  the
  first generation younger than the transferor, and
    (3) similar rules for a new generation every 25 years.

    (e) Special rules for persons with a deceased parent.--
    (1) In general.--For purposes of determining whether any transfer is a
  generation-skipping transfer, if--
    (A)  an  individual  is a descendant of a parent of the transferor (or
  the transferor's spouse or former spouse), and
    (B) such individual's parent who is a lineal descendant of the  parent
  of  the transferor (or the transferor's spouse or former spouse) is dead
  at the time the time the  transfer  (from  which  an  interest  of  such
  individual  is  established  or  derived) is subject to a tax imposed by
  chapter 11 or 12 upon the transferor (and if there shall be more than  1
  such  time,  then  at  the earliest such time), such individual shall be
  treated as if such individual were a member of the generation which is 1
  generation below  the  lower  of  the  transferor's  generation  or  the
  generation assignment of the youngest living ancestor of such individual
  who  is  also  a  descendant  of  the  parent  of the transferor (or the
  transferor's spouse or former spouse), and the generation assignment  of
  any descendant of such individual shall be adjusted accordingly.
    (2)  Limited  application  of  subsection  to  collateral heirs.--This
  subsection shall not apply with respect to a transfer to any  individual
  who  is  not  a lineal descendant of the transferor (or the transferor's
  spouse or  former  spouse)  if,  at  the  time  of  the  transfer,  such
  transferor has any living lineal descendant.
    (f) Other special rules.-
    (1)  Individuals  assigned  to  more  than  one  generation.-Except as
  provided in regulations, an individual who,  but  for  this  subsection,
  would  be  assigned to more than one generation shall be assigned to the
  youngest such generation.
    (2) Interests through entities.-Except as provided in  paragraph  (3),
  if  an  estate,  trust, partnership, corporation, or other entity has an
  interest in property, each individual having a  beneficial  interest  in
  such  entity shall be treated as having an interest in such property and
  shall be assigned to a generation under the foregoing provisions of this
  subsection.
    (3) Treatment of certain  charitable  organizations  and  governmental
  entities.-Any-
    (A) organization described in section 511(a)(2),
    (B) charitable trust described in section 511(b)(2), and
    (C) governmental entity,
    shall be assigned to the transferor's generation.