Bill > SB376

This bill amends California's tax law regarding incomplete gift nongrantor trusts (IGNTs), which are specialized trusts that allow individuals to transfer assets while maintaining certain tax advantages. The bill specifically modifies the definition of an IGNT to exclude charitable remainder trusts (a type of trust that provides income to a non-charitable beneficiary for a period of time before donating the remaining assets to a charitable organization). Under the existing law, income from an IGNT could be included in the grantor's gross income under certain conditions, and this bill maintains that general framework while carving out an exception for charitable remainder trusts. To qualify for special tax treatment, an IGNT must meet specific requirements, such as filing a California Fiduciary Income Tax Return, being classified as a nongrantor trust, and distributing at least 90% of its distributable net income to a charitable organization. The bill also includes provisions allowing the Franchise Tax Board to prescribe regulations for implementing these changes. The Legislature explicitly states that the goal of this exclusion is to continue supporting charitable efforts, and the bill takes effect immediately as a tax levy.

Budget and Finance

https://leginfo.legislature.ca.gov/faces/billStatusClient.xhtml?bill_id=202520260SB376