Stephen M. Breitstone, head of Meltzer Lippe’s Private Wealth & Taxation Group, co-authored, with Jerome M. Hesch and David C. Jacobson, an article published in the June 19, 2017 issue of Tax Notes entitled “Statutory Clarity for Early Termination of NICRUTS and NIMCRUTs.”
The authors write: “On December 18, 2015, President Obama signed a bipartisan bill, the Protecting Americans From Tax Hikes (PATH) Act which provides a definitive method for valuing the interests in some charitable remainder trusts (CRTs) that terminate before the end of their stated terms. The relevant statutory language, added to section 664(e), is terse but unequivocal:
In the case of the early termination of a trust which is a charitable remainder unitrust by reason of subsection (d)(3), the valuation of interests in such trust for purposes of this section shall be made under rules similar to the rules of the preceding sentence [referring to the valuation method on contribution].
In this article, the authors discuss “the issues that have been resolved by section 664(e) and explain how established principles of statutory construction (and the relevant legislative history) may be relied on to fill in the blanks on the key elements of early terminations.”