Proposed Reform to Restrict GRATs

On June 9, Representative Sander Levin introduced H.R. 5486 which would make several non-estate tax reforms to provide tax incentives for small business creation.

In order to help pay for the reforms, H.R. 5486 would restrict grantor retained annuity trusts (GRATs). H.R. 4849 was Levin’s first proposal to restrict GRATs, and the two proposals restrict GRATs in exactly the same ways. For example, both set a minimum ten-year term requirement.

For a side-by-side comparison of H.R. 4849 and H.R. 5486, see Hani Sarji, On June 9, 2010, Rep. Sander Levin introduced another bill that would restrict GRATs – H.R. 5486 , Future of the Federal Estate Tax, June 12, 2010.  See also my previous blog regarding H.R. 4849.   

Special thanks to Hani Sarji (LL.M in Tax candidate at New York Law School) for bringing this to my attention.