MSCI Opposes Proposed Changes To U.S. Grantor Trust And Valuation Rules

Last week, MSCI joined more than 90 trade associations representing millions of individually- and family-owned businesses to oppose proposed changes to grantor trust and valuation rules in Democrats’ Build Back Better budget reconciliation.

The letter, which is available here and was sent to the chair and ranking member of the U.S. House Ways and Means Committee, focused on the adverse impact that these proposed changes would have on family businesses nationwide. Specifically, the letter said, “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 facilitating the transfer of business ownership between generations and protecting assets from liability or creditor claims of a trust beneficiary.”

It also warned that the “new rules would unfairly punish taxpayers who relied on decades-old laws and Internal Revenue Service guidance to establish estate plans to transfer family businesses to future generations, threatening the viability of thousands of family businesses across the country.”

Regarding changes to the valuation rules, the letter focused on the impact those changes would have on family businesses. Proponents of provision claim it would ensure billionaires pay their fair share of taxes, but in reality, family-owned businesses would bear the brunt of these tax increases, threatening their ability to stay in the family.

Read more from the S-Corp Association here.