S.4287

The GRATS Act modifies rules for grantor trusts under the Internal Revenue Code.

The Getting Rid of Abusive Trust Schemes Act, or GRATS Act, amends the Internal Revenue Code to modify rules for grantor trusts. It introduces a 15-year minimum term for grantor retained annuity trusts and requires the remainder interest to have a specific value. Transfers between a trust and a deemed owner are treated as sales or exchanges. The bill also denies deductions for taxes paid on the income of grantor trusts and treats such taxes as taxable gifts. These changes apply to trusts created on or after the enactment date of the Act.