Direct payments of educational expenses for a skip person to an educational institution are categorized as which GST transfer?

• A. Direct Skip
• B. Taxable Distribution
• C. Unlimited Exclusion Payment
• D. Taxable Termination

Answer: (C)

Direct payments of tuition to an educational institution for a skip person are treated as an unlimited exclusion from GST transfer tax. The rule is that when the payment goes directly to the school for qualified education expenses for a skip person, it is excluded from GST, with no dollar cap. That’s why this scenario fits the unlimited exclusion payment category. The other options don’t describe this specific direct-education-payment exclusion, as they imply taxable transfers or different transfer types.