estate planning
2023 Gift and Estate Tax Exemption
2023 gift and estate tax exemption and annual gift exclusion. How much can you gift without a gift tax?
The Estate and Gift Tax Exemption and Annual Gift Exclusion 1997-2024.
The IRS has announced the 2024 Estate and Gift Tax Exemptions
The 2024 Estate, Gift and Generation-Skipping Transfer tax exemption amount is $13,610,000 ($27,220,000 for a married couple). This is an increase from the 2023 exemption of $12,920,000.
The 2024 Gift Tax Annual Exclusion is $18,000 ($36,000 for a couple). This is an increase from the 2023 exclusion of $17,000.
How We Got Here
In 2010, President Obama raised the gift and estate tax exemption to $5,000,000, indexed for inflation.
In 2017, President Trump doubled the gift and estate tax exemption to $10,000,000, also indexed for inflation, but Trump's exemption is scheduled to sunset at the end of 2025, unless Congress and the President make it permanent.
If Trump's exemption sunsets at the end of 2025, the gift and estate tax exemption will default to Obama's exemption, which is estimated to be around $7,000,000 ($5,000,000 indexed for inflation since 2011).
Historical Gift and Estate Exemptions
The current estate and gift tax situation is very positive compared to years past.
Below is a table showing the historical estate tax exemption, estate tax rate and annual exclusion since 1997.
Notice that in 1997 the estate tax exemption was only $600,000 and the estate tax rate was 55%, which meant that if you had an estate worth more than $1,000,000 your estate tax would be $1,000,000 - $600,000 = $400,000 (55%) = $220,000. Yikes!
| Year | Gift and Estate Tax Exemption | Estate Tax Rate | Annual Gift Exclusion |
| 1997 - 2001 | $600,000 - $675,000 | 55% | $10,000 |
| 2002 - 2005 | $1,000,000 - $1,500,000 | 50% - 47% | $11,000 |
| 2006 - 2008 | $2,000,000 | 46% - 45% | $12,000 |
| 2009 | $3,500,000 | 45% | $13,000 |
| 2010 | no estate tax 😎 | no estate tax 😎 | $13,000 |
| 2011 - 2017 | $5,000,000 - $5,490,000 | 35% - 40% | $13,000 - $14,000 |
| 2018 | $11,180,000 | 40% | $15,000 |
| 2019 | $11,400,000 | 40% | $15,000 |
| 2020 | $11,580,000 | 40% | $15,000 |
| 2021 | $11,700,000 | 40% | $15,000 |
| 2022 | $12,060,000 | 40% | $16,000 |
| 2023 | $12,920,000 | 40% | $17,000 |
| 2024 | $13,610,000 | 40% | $18,000 |