This morning, more than 90 trade associations representing millions of individually- and family-owned businesses sounded the alarm on the proposed changes to grantor trust and valuation rules in the Build Back Better Act (H.R. 5376) and called on lawmakers to reject these provisions.

The letter builds on a prior S-Corp letter sent last week, focusing on the adverse impact these proposed changes would have on family businesses nationwide.  Regarding Grantor trusts, the letter reads:

The changes related to the taxation of grantor trusts would eliminate the usefulness of the grantor trust for normal and legitimate business (non-tax) purposes, such as …

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Like a vampire, the Wyden “mark-to-market” (or M2M) proposal rose from the dead over the weekend in what appeared to be a Hail Mary effort to replace large portions of the House tax hike plan at the last minute. Those parts were objected to by Senator Sinema, leaving negotiators with a large hole both in their revenue and their rhetoric.  Enter M2M.  Then Senator Manchin and Chairman Neal spoke up in opposition to the idea.  Exit M2M.

Before we get to the outlook, it’s important to focus first on just how bad an idea M2M is.  As we …

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Ken Kies is a former head of Congress’ Joint Committee on Taxation and one of Washington’s most respected tax experts. Today he has a succinct and highly persuasive defense of the Section 199A deduction that’s worth the attention of tax writers.

In a letter published in Tax Notes, Kies makes clear that C corporations are already tax advantaged when compared to pass-through businesses, and that paring back 199A would only make the imbalance worse:

Current law should be retained in its entirety. Taking into account all the proposed changes in the pending legislation, passthrough businesses would wind up being taxed more …

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