The Internal Revenue Service has announced inflation adjustments to exemptions and exclusions for estate, gift and generation-skipping transfer taxes for tax year 2024.
Estate and Gift Tax Exemption: For gifts made in 2024 and for estates of decedents who die in 2024, the federal estate and gift tax exemption amount is $13,610,000. This reflects an increase from the 2023 estate and gift tax exemption amount, which is $12,920,000.
Generation-Skipping Transfer Tax Exemption: The exemption amount for generation-skipping transfers in 2024 is $13,610,000, also reflecting an increase from the 2023 generation-skipping transfer tax exemption amount, which is $12,920,000.
Annual Gift Tax Exclusion: The annual gift tax exclusion amount for 2024 is $18,000 per donee, or $36,000 for gift-splitting married couples. This is an increase from the 2023 annual gift tax exclusion, which is $17,000.
Gifts to Non-U.S. Citizen Spouses: The gift tax exclusion amount for gifts made to a non-U.S. citizen spouse in 2024 is $185,000.
The issued adjustments are part of the Tax Cuts and Jobs Act of 2017, which temporarily increased the estate and gift tax and generation-skipping transfer tax exemptions from $5,000,000 to $10,000,000, indexed for inflation. However, this provision will sunset at the end of 2025. Without further Congressional action, on January 1, 2026, the gift tax, estate tax and generation-skipping transfer tax exemptions will decrease to $5,000,000, adjusted for inflation.