Document Type


Publication Title

Estate Planning

Publication Date



On 7/6/04, the IRS issued Rev. Rul. 2004-64 (the "Ruling"). It addresses (1) gift tax consequences of a grantor's payment of the income tax attributable to the inclusion of the trust's income in the grantor's gross income under the grantor trust rules and (2) estate tax consequences of the trust's reimbursement to the grantor for those income tax payments. ....

This article provides background on the grantor trust rules of subpart E of part 1 of Subchapter J, Chapter 1 of the Internal Revenue Code, describes the advantages of creating a grantor trust, analyzes the holdings set forth in the Ruling, and explores the possible applications and implications of the Ruling for practitioners in drafting and administering grantor trusts.