HOUSE_OVERSIGHT_022363.jpg
2.53 MB
Extraction Summary
6
People
3
Organizations
0
Locations
4
Events
3
Relationships
4
Quotes
Document Information
Type:
Tax law analysis report
File Size:
2.53 MB
Summary
This document, dated April 29, 2013, is a technical analysis of proposed changes to U.S. tax laws affecting sophisticated estate planning techniques. It details proposals to eliminate the benefits of 'sales to defective grantor trusts', extend estate tax liens, and curb the use of Health and Education Exclusion Trusts (HEETs) by clarifying the rules for the Generation-Skipping Transfer tax. The document carries a Bates number suggesting it was collected as part of a House Oversight committee file.
People (6)
| Name | Role | Context |
|---|---|---|
| grantor | Creator of a trust |
Discussed in relation to 'defective grantor trusts' and insurance trusts. A proposal aims to tax transactions between...
|
| beneficiary | Recipient of trust assets/income |
Mentioned as a potential deemed owner of a trust and a recipient of distributions for tuition and medical expenses (e...
|
| deemed owner | Individual treated as the owner of a trust for tax purposes |
A central figure in a proposal to tax sales between the owner and the trust, which could trigger estate or gift tax.
|
| donor | Person making a gift |
Discussed in the context of making direct payments for tuition and medical expenses, which are free of gift and GST t...
|
| decedent | A deceased person |
Mentioned in the section on estate tax deferrals, which can last for 15+ years from the decedent's death.
|
| grandparent | Family relation / Donor |
Used as an example of a donor whose direct payments for a grandchild's tuition are free of generation-skipping transf...
|
Organizations (3)
| Name | Type | Context |
|---|---|---|
| IRS (Internal Revenue Service) |
Mentioned as the agency that may have difficulty collecting estate tax if a tax lien expires before the tax is paid.
|
|
| Congress |
Mentioned as the legislative body where a bill proposing changes to the tax treatment of HEETs would be introduced.
|
|
| House Oversight |
Referenced in the document's Bates number (HOUSE_OVERSIGHT_022363), indicating it is part of a collection of document...
|
Timeline (4 events)
2012 (approx.)
First appearance of a proposal to unify income and transfer tax rules for grantor trusts, which was broadly worded.
2013-04-29
Discussion of a new, more targeted iteration of the proposal to eliminate the tax benefits of a 'sale to a defective grantor trust'.
2013-04-29
Discussion of a proposal to extend the ten-year lien on estate assets to cover the full 15+ year estate tax deferral period.
2013-04-29
Discussion of a proposal to 'clarify' (i.e., restrict) the Generation-Skipping Transfer (GST) tax exemption for tuition and medical payments, making it apply only to living donors and not to trusts like HEETs.
U.S. Congress (proposed)
Relationships (3)
A 'sale to a defective grantor trust' can pass significant potential appreciation to the grantor's heirs free of gift tax.
Insurance trusts can use income to pay premiums on the life of the grantor or the grantor's spouse.
donor (e.g., grandparent)
→
Financial Support / Gifting
→
beneficiary (e.g., grandchild)
A donor can make direct payments for a grandchild's tuition and medical expenses free of gift and GST tax.
Key Quotes (4)
"sale to a defective grantor trust"Source
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Quote #1
"HEETs,” or Health and Education Exclusion Trusts"Source
HOUSE_OVERSIGHT_022363.jpg
Quote #2
"clarify” that this GST exclusion for direct payments of tuition or medical expenses only applies to payments made by a living donor, and not from a trust."Source
HOUSE_OVERSIGHT_022363.jpg
Quote #3
"The desire to “clarify” this special exclusion reflects the perception that HEETs are abusive, given the proposal’s recommended effective date (introduction, rather than enactment, of legislation)."Source
HOUSE_OVERSIGHT_022363.jpg
Quote #4
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