Inflation-Adjusted 2020 Unified Estate and Gift Tax Exclusion Amounts

It just keeps getting better for wealthy individuals! The Internal Revenue Service recently announced the inflation-adjusted estate and gift tax exclusion amount for 2020.  For gifts made and estates of decedents dying in 2020, the exclusion amount will be $11,580,000 per person – up from $11,400,000 in 2019.  The generation-skipping transfer (GST) tax exemption will also increase to $11,580,000 per person – again up from $11,400,000 in 2019. 

There will be no change in the gift tax annual exclusion for 2020, that amount remains at $15,000.  The annual exclusion for gifts to noncitizen spouses will be $157,000 in 2020 – up from $155,000 in 2019.

Tax policy is ever changing and these exclusion amounts may not last forever.  Many political candidates have espoused a desire to dramatically reduce the exclusion.  Without an affirmative change by Congress, the increased exclusion amounts sunset at the end of 2025, at which time, the exclusion for gift, estate and GST is reduced to $5,000,000 (adjusted for inflation).  For those taxpayers that have the means to take advantage of these historic exclusion amounts, the time to plan is now.