Fairmark.com

A day after it appeared there was a breakthrough to permit Senate action on the small business tax bill, negotiations hit a snag that apparently will prevent movement until after the August recess. The parties were unable to reach agreement on what amendments Republicans would be permitted to offer for floor consideration, and sixty votes to close debate are not available without such agreement.

[Corrected] Congress has approved a war funding bill that does not include the new restrictions on grantor retained annuity trusts, or GRATs, that had appeared in an earlier version of the bill. The key provision imposes a minimum ten-year term on these trusts used in estate planning. Although the provision was eliminated from this law, it is likely to appear in later legislation as it is part of President Obama’s budget proposal.

For fuller discussion see our earlier reporting on this development: Last Gasp for Short GRATs?

Correction: An earlier version of this entry indicated that the GRAT restrictions were included in the bill as passed by Congress.

Following agreement by Majority Leader Harry Reid to allow floor consideration of Republican amendments, the Senate appears poised to move forward with the small business tax bill. In addition to providing various tax benefits to small business, the Senate version of the bill would permit rollovers from regular 401k accounts to designated Roth accounts within the same plan. The most recent version would also eliminate the advance earned income credit.

It isn’t clear what amendments Republicans will offer, but a likely candidate is a repeal of the expanded Form 1099 reporting requirement that was included in the healthcare legislation.