The IRS has published its revenue proposals, noting its policy priorities in the estate and gift arena, many of which continue from prior years:
- Changing generation-skipping transfer (GST) rules applicable to trusts that are defined as non-skip persons because they include a charitable beneficiary.
- Implementing rules to restrict the structure of payments to charitable lead annuity trusts (CLATs) to avoid deferring charitable payments at the expense of the charities.
- Treating loans to beneficiaries from GST trusts as distributions for GST and income tax purposes.
- Requiring a minimum remainder value of 25% and a term of 10 years for grantor-retained annuity trusts, among other types of trusts.
- Prohibiting discounting the estate tax value of promissory notes issued at the minimum applicable federal rate for income tax purposes.
- Treating carried interests as ordinary income.
- Prohibiting the deferral of gain on the exchange of real property used in a trade or business under the like-kind exchange rules and instead treating the gains from the exchange that exceed a certain threshold as a sale.