When Inflation Isn't All Bad?

Our wealth transfer tax system provides taxpayers with exclusions from certain taxes. These exemptions are adjusted annually; the amount of the adjustment is tied to the Consumer Price Index. Thomson Reuters Checkpoint has estimated the 2023 indexed amounts as follows:

Unified estate and gift tax exclusion amount.
For decedents dying or gifts made in 2023, the exclusion amount is estimated to be $12,920,000 (an increase of $860,000 from the 2022 exclusion of $12,060,000). 

Generation-skipping transfer (GST) tax exemption.
The estimated GST exemption amount for 2023 is $12,920,000 (an increase of $860,000 from the 2022 exemption amount of $12,060,000).

Gift tax annual exclusion.
The estimated gift tax annual exclusion amount is $17,000 (an increase of $1,000 from the 2022 exclusion amount of $16,000).

Annual exclusion for gifts to noncitizen spouses.
The estimated annual exclusion for gifts to non-citizen spouses is $175,000 (an increase of $11,000 from 2022 exclusion amount of $164,000).

While these are merely estimates until the IRS confirms, advisors may begin formulating ways to take advantage of these indexed amounts in January. For married couples, the tax-free ability to shift an additional $1,720,000 of wealth is significant.

For questions regarding this blog post or any other estate planning matter, please feel free to contact Eric Marchand at (214)744-3700 or emarchand@meadowscollier.com.