Bill · S. 4287· Senate(119-S-4287)
GRATS Act
- Introduced
- 4/14/2026
- Last activity
- 4/14/2026 — Read twice and referred to the Committee on Finance.
- Sponsored by
- Ron Wyden
- Cosponsors
- - 0 - 0
- Introduced
- In Committee
What this bill would do
The GRATS Act aims to modify the Internal Revenue Code of 1986 regarding grantor trusts. It introduces new requirements for grantor retained annuity trusts, including specific terms for receiving fixed amounts and minimum values for remainder interests. The bill also treats certain property transfers between a trust and a deemed owner as sales or exchanges. Additionally, it establishes that taxes paid on the income of an applicable grantor trust are treated as taxable gifts. These changes impact how trusts are managed and taxed.
Yes
Does this raise taxes on the highest earners?+6
The bill increases taxes on high-net-worth individuals by treating tax payments on certain grantor trust income as taxable gifts and treating property transfers as sales.
Does this make the government pay for what it commits to?+2
The bill increases federal revenue by closing tax loopholes associated with grantor retained annuity trusts and property transfers.
The opposite· 3 of 4
Would high-income households be better off under this?-7
The bill negatively impacts high-income households by imposing stricter requirements on grantor trusts and treating income tax payments as taxable gifts.
Would people with substantial wealth be better off under this?-7
The bill imposes new tax liabilities and stricter term requirements on high-net-worth individuals utilizing grantor retained annuity trusts.
Would the very wealthiest people be better off under this?-7
The bill targets complex trust structures frequently used by the ultra-wealthy to minimize gift and estate taxes.
Who it would affect, and how
Potential Positive Impacts for People
-
New requirements for grantor retained annuity trusts: Under Section 2, specific terms are established where the right to receive fixed amounts must be for a term of not less than 15 years and not more than the life expectancy of the annuitant plus 10 years. This includes a requirement that annual fixed amounts do not decrease during the term. (Section 2(a)(2))
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Remainder interest value standards: The bill requires that the remainder interest has a value that is not less than the greater of 25 percent of the fair market value of the property transferred or $500,000. (Section 2(a)(2)(C))
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Clarification of property transfers: The bill treats transfers of property for consideration between a trust and a deemed owner as a sale or exchange, which includes the satisfaction of an annuity or discharge of debt by the trust in kind. (Section 3(a))
Potential Negative Impacts for People
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Taxation of income payments as gifts: For applicable grantor trusts that are not fully revocable, the amount of taxes paid on the trust's income by a deemed owner will be treated as a taxable gift. (Section 4(a)(1))
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Denial of tax deductions: The bill denies deductions for any amount treated as a gift due to the payment of taxes on the income of a grantor trust. (Section 4(b))
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Restrictions on certain transfers: Transfers of property for consideration between a trust and a deemed owner will be treated as a sale or exchange, regardless of the person's status as a deemed owner, unless certain exceptions apply. (Section 3(a))
Groups and Interests Ranking
Every group the model scored this bill for, from -10 to +10. Hover a score for the reason it gave.
- Demographic And Interest Groups
- Good For Billionaires-7Good For High Income Households-7Good For High Net Worth Individuals-7Good For Ultra High Net Worth Individuals-7
- Economy And Finance
- Increases Wealthy Taxes+6Improves Fiscal Responsibility+2
- 4/14/2026
- Read twice and referred to the Committee on Finance.
- 1 Cosponsor added.
- Introduced in Senate
Angus KingIndependent · Maine