Issue Number:    IR-2026-82

Inside This Issue

Treasury, IRS issue final regulations naming certain charitable remainder annuity trust transactions as listed transactions

IR-2026-82, July 8, 2026

WASHINGTON —The Department of the Treasury and the Internal Revenue Service today issued final regulations identifying certain arrangements purporting to be Charitable Remainder Annuity Trusts as listed transactions. Material advisors and certain participants in these listed transactions are required to file disclosures with the IRS and are subject to penalties for failure to disclose.  “The Internal Revenue Service remains vigilant and is watching out for tax avoidance schemes,” said IRS Chief Executive Officer Frank J. Bisignano. “Taxpayers should not forget that the IRS will continue to combat abusive tax shelters and transactions.”

The final regulations describe a transaction in which taxpayers purport to eliminate ordinary income and/or capital gain on the sale of property.

In abusive transactions of this type,

• Property with a fair market value in excess of its basis, for example, interests in a closely-held business, and/or assets used or produced in a trade or business, is transferred to a purported CRAT.
• The purported CRAT then sells the property and uses some or all of the net proceeds to purchase a single premium immediate annuity (SPIA).
• By misapplying the rules under sections 72 and 664, the taxpayer, or beneficiary, claims that the CRAT annuity is taxable to the recipient only to the extent of the income portion of the SPIA annuity payment.

These final regulations follow the previously proposed regulations identifying certain CRAT transactions and substantially similar transactions as “listed transactions” for tax reporting purposes.

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