S 3988 118th Congress Senate Taxation

GRATS Act

Introduced: March 20, 2024 Introduced by: Wyden, Ron Democratic · Oregon See on congress.gov

Everywhere this bill has been 2 steps

Introduced

In committee

Reported out

Passed House

Passed Senate

To President

Became law

Mar 20, 2024

Read twice and referred to the Committee on Finance.

Mar 20, 2024

Introduced in Senate

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Plain-English summary Congressional Research Service

Getting Rid of Abusive Trust Schemes Act or the GRATS Act

This bill imposes new requirements on grantor retained annuity trusts (GRATs) to discourage tax avoidance schemes by wealthy taxpayers. Specifically, such trusts must have a minimum term of 15 years and a maximum term of the life expectancy of the annuitant plus 10 years. The bill also prohibits any decrease in a GRAT during its term and requires that the remainder interests in such trusts at the time of their transfer must have a minimum value for gift tax purposes.

The bill also treats a transfer of property between a GRAT and its deemed owner as a sale or exchange for income tax purposes, with specified exceptions.

The bill designates any income tax paid on the income of a GRAT as a gift for purposes of the gift tax unless the owner of the trust is reimbursed during the same calendar year. The amount of the gift may not be reduced through the use of certain deductions, including the charitable or marital deduction, or gifts of tuition or medical care.

What's happening now March 20, 2024

Read twice and referred to the Committee on Finance.

Bill text 1 version