IRS raises estate and gift tax exemption to $15.48 million for 2027
The federal basic exclusion amount will rise from $15 million in 2026, though state estate and inheritance tax exemptions may be lower.
At a glance
- The IRS raised the federal estate and gift tax exemption to $15.48 million per person for 2027, up from $15 million in 2026.
- The exemption applies to tax-free transfers made during life and at death, while state estate and inheritance tax exemptions can be lower.
- The IRS also adjusted income tax brackets, capital gains brackets and earned income tax credit eligibility for 2027.
The Internal Revenue Service announced on Thursday that the federal estate and gift tax exemption will rise to $15.48 million per person for 2027. The new figure is up from $15 million per person in 2026.
The exemption is formally known as the federal basic exclusion amount. It applies to tax-free transfers made during a person's life and at death. State estate and inheritance tax exemptions can be lower than the federal exemption.
Other inflation adjustments
The IRS also increased the figures for dozens of other provisions for 2027, the agency said. Those provisions include federal income tax brackets, capital gains tax brackets and eligibility for the earned income tax credit, among others.
The 2027 inflation adjustments arrive as Americans continue to wrestle with affordability issues. Those issues include rising costs for housing, groceries, gasoline and other living expenses.
What changed and why
President Donald Trump's "big beautiful bill" increased the estate and gift tax exemption to $15 million per person. Without the change from Congress, the exemption would have reverted after 2025 to its 2017 level — $5 million plus an inflation adjustment. That possibility spurred proactive estate planning from ultra-wealthy families before the legislation, according to the source.
Few estates pay federal tax
Current law means that few families owe federal estate taxes. For 2026, families are expected to file about 6,890 federal estate tax returns, and roughly 3,900 of those returns will be taxable, according to estimates from the Tax Policy Center, a think tank.
Source: CNBC.
Questions and answers
- What is the 2027 estate and gift tax exemption?
- The IRS set the federal basic exclusion amount at $15.48 million per person for 2027, up from $15 million in 2026. It applies to tax-free transfers during life and at death.
- Will most families pay federal estate tax?
- Current law means few families owe federal estate taxes. Estimates from the Tax Policy Center indicate about 6,890 federal estate tax returns will be filed for 2026, and roughly 3,900 will be taxable.
- What did Trump's 'big beautiful bill' do to the estate tax exemption?
- It increased the estate and gift tax exemption to $15 million per person. Without the change, the exemption would have reverted after 2025 to its 2017 level of $5 million plus an inflation adjustment.
