; and (4) by adding at the end the following new paragraph: (2) Additional requirements with respect to grantor retained annuities For purposes of subsection (a), in the case of an interest described in paragraph (1)(A) (determined without regard to this paragraph) which is retained by the transferor, such interest shall be treated as described in such paragraph only if— (A) the right to receive the fixed amounts referred to in such paragraph is for a term of not less than 10 years and not more than the life expectancy of the annuitant plus 10 years, (B) such fixed amounts, when determined on an annual basis, do not decrease during the term described in subparagraph (A), and (C) the remainder interest has a value, as determined as of the time of the transfer, which is— (i) not less than an amount equal to the greater of— (I) 25 percent of the fair market value of the property in the trust, or (II) $500,000, and (ii) not greater than the fair market value of the property in the trust. . (b) Effective date The amendments made by this section shall apply to transfers made after the date of the enactment of this Act. 203. Certain transfer tax rules applicable to grantor trusts (a) In general Subtitle B is amended by adding at the end the following new chapter: 16 Special rules for grantor trusts Sec. 2901. Application of transfer taxes. 2901. Application of transfer taxes (a) In general In the case of any portion of a trust to which this section applies— (1) the value of the gross estate of the deceased deemed owner of such portion shall include all assets attributable to that portion at the time of the death of such owner, (2) any distribution from such portion to one or more beneficiaries during the life of the deemed owner of such portion shall be treated as a transfer by gift for purposes of chapter 12, and (3) if at any time during the life of the deemed owner of such portion, such owner ceases to be treated as the owner of such portion under subpart E of part 1 of subchapter J of chapter 1, all assets