ABA RPTEL Writes a Letter to Congress Urging Action on Estate and GST Taxes

On December 1, the ABA Section of Real Property, Trust & Estate Law sent a Letter to Congress, urging Congress to address the pending estate and GST tax legislation before adjournment. In the letter, ABA Section of Real Property, Trust & Estate Law does not voice any position regarding the proper approach to solving the estate and GST tax issues, but requests Congress to provide certainty regarding:

1. If the estate tax is applied retroactively, will families of decedents who died in 2010 have the opportunity to restructure their decedents’ estate plans?
2. If the GST tax laws are applied retroactively, or if the gift tax rates are increased retroactively, will donors have the right to rescind or restructure transfers they made in 2010 in reliance on the 2010 gift tax and GST tax laws?
3. Whether assets transferred to trusts in 2010 will be subject to the GST tax in future years when assets are distributed to skip persons. This requires a revision of I.R.C. § 2664.
4. Whether taxpayers can allocate GST exemption to transfers made in 2010 to protect them from the imposition of the GST tax in future years when assets are distributed to skip persons.
5. Whether all GST administrative rules that were enacted under EGTRRA will be preserved in future years, such as the rules clarifying proper compliance with GST tax rules.
6. Whether the estate tax rules and definitions of Chapter 11 otherwise continue to apply during 2010, such as qualifications for charitable deductions. This requires a revision of I.R.C. § 2210.
7. A clarification of a provision of Section 901 of EGTRRA that requires the tax law to be applied from January 1, 2011, as if EGTRRA “had never been enacted.”
8. Whether Congress will implement a system requiring compliance with the carryover basis rules of I.R.C. § 1022, which would be technically complex and administratively burdensome.

In conclusion, the ABA RPTEL urges “Congress to pass legislation promptly to provide the certainty and stability that taxpayers deserve in the transfer tax system.”

Alan R. Rothschild, Jr. and Charles H. Egerton, Letter to Congress, ABA Section of Real Property, Trust & Estate Law, Dec. 1, 2010.