Clarification regarding disallowance of step-up in basis for property held in certain grantor trusts

(a) In general Section 1014 is amended— (1) by redesignating subsection (f) as subsection (g), and (2) by inserting after subsection (e) the following: (f) Property held in certain grantor trusts This section shall not apply to property— (1) held in a trust of which the transferor is considered the owner under subpart E of part I of subchapter J, and (2) if, after the transfer of such property to the trust, such property is not includible in the gross estate of the transferor for purposes of chapter 11.. (b) Conforming amendment Section 6662(k) is amended by striking 1014(f) and inserting 1014(g). (c) Effective date The amendments made by this section shall apply to transfers after the date of the enactment of this Act. (d) No inference No inference may be drawn from the amendments made by this section with respect to the application of section 1014 of the Internal Revenue Code of 1986 to property described in subsection (f) of such section (as added by subsection (a)) which was transferred on or before the date of enactment of this Act.