of gift In the case of any amount treated for purposes of this subtitle as a taxable gift pursuant to paragraph (1), such gift shall be deemed to have occurred on the earlier of— (A) December 31 of the calendar year for which the tax is paid by the person who is the deemed owner, (B) the day before the date of the death of such person, or (C) the date on which such person renounces any right of reimbursement by the applicable grantor trust with respect to the calendar year for which the tax is paid by such person. (5) Deemed owner For purposes of this subsection, the term deemed owner has the same meaning given such term under section 1062(c). . (b) Conforming amendments (1) Section 2522 of the Internal Revenue Code of 1986 is amended— (A) by redesignating subsection (f) as subsection (g), and (B) by inserting after subsection (e) the following new subsection: (f) Denial of deduction for payment of tax on income of grantor trust No deduction shall be allowed under this section for any amount which is treated as a gift by reason of section 2503(d). . (2) Section 2523 of such Code is amended by adding at the end the following new subsection: (j) Denial of deduction for payment of tax on income of grantor trust No deduction shall be allowed under this section for any amount which is treated as a gift by reason of section 2503(d). . (c) Effective dates The amendments made by this section shall apply to trusts created on or after the date of enactment of this Act.