![]() In her response, the Secretary pointed to the similar proposals in the Department=s 2024 Green Book to Aclamp down on that type of Ĭoincidentally, perhaps, and only nine days after they signed their letter, the Department issued a Revenue Ruling on March 29, 2023, formally eliminating the first enumerated tax advantages by holding that assets that are not part of an estate for estate tax purposes do not receive a basis adjustment when the grantor dies. In testimony before the Senate Appropriations Financial Services and General Government Subcommittee on March 22, 2023, Senator Van Hollen asked Secretary Yellen about the letter and whether the Treasury Department would Atake a at their grantor trust proposals. These include the Treasury=s estimate of how much money is currently held in grantor trusts, its plans to take administrative action to address tax avoidance through grantor trusts, and its estimate of how much tax revenue could be raised from changing the rules related to grantor trusts. The letter concluded with a request that the Treasury Department provide answers to a series of questions before April 3, 2023. ![]() Finally, the senators requested that the IRS confirm that when a grantor pays income taxes that are attributable to trust income, those payments are subject to the gift tax. They also asked the Treasury Department to clarify that the assets held by an Intentionally Defective Grantor Trust are not entitled to an income-tax basis adjustment to the fair market value of the assets on the death of the grantor.ģ. ![]() They asked the Treasury Department to revoke its Revenue Ruling that provided that the transfer of assets between a grantor and grantor trust is a non-taxable event and the sale of assets to an Intentionally Defective Grantor Trust therefore triggers income tax.Ģ.
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