The Internal Revenue Service recently announced the 2024 annual inflation adjustments to the lifetime exclusion for federal estate and gift tax (the “basic exclusion amount”) as well as the annual gift tax exclusion, among many others.
For individual taxpayers who die in 2024, up to $13,610,000 of the decedent’s gross estate at death, decreased by lifetime taxable gifts, will be excluded from the imposition of federal estate tax (an increase from $12,920,000 for individuals dying in 2023). This increase means that a married couple can shield up to $27,220,000 in assets without having to pay any federal estate or gift tax (an increase from $25,840,000 in 2023).
Individual taxpayers may also make gifts up to $18,000 per gift recipient (up to $36,000 per recipient for married couples) in 2024 without using any of their lifetime estate and gift tax exclusion. Gifts paid directly to educational institutions and medical providers remain exempt from gift tax.
The historically high basic exclusion amount resulting from the passage of the Tax Cuts and Jobs Act in 2017 is set to “sunset” at the end of 2025. Absent congressional action, the 2026 basic exclusion amount will be reduced to approximately $7,000,000. Speak to an estate planner about various gifting and planning strategies that may be available to “lock in” the current basic exclusion amount and maximize tax savings for your loved ones.
receive news & alerts
Yes! I’d like to receive updates with firm news and insights that are relevant to me!