Current tax proposals could change the tax treatment of irrevocable grantor trusts. Gifts to grantor trusts after a certain date may be disregarded for gift and estate tax purposes as well. On the other hand, sales or exchanges between a grantor and a grantor trust may become taxable for income tax purposes after a certain date.
While these changes seem simple to explain, there are many nuances to analyze in the context of future transfers to grantor trusts. There is also a very short runway to take action, especially for trusts with recurring payments such as ILITs, as transfers occurring after tax reform is passed may not be grandfathered if the grantor trust reform proposals are enacted.
In this video, you will learn what you need to know in-depth to analyze the effect of this proposal. You will also learn some immediate actions which can be taken to avoid or defer the effect of the changes to grantor trust taxation if these changes are indeed enacted.
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