Take Advantage of Increase to Lifetime Exemption

The IRS just announced final inflation adjusted amounts for certain estate and gift tax items.

Photo by Federico Respini on Unsplash

The IRS just released Revenue Procedure 2024-40 which provides the inflation adjusted items for all tax provisions including estate and gift taxes.

The lifetime exemption for estate and gift taxes increases from $13.61 million up to $13.99 million or a $380,000 increase. Even if the exemption drops in half in 2026, this is still almost a $200,000 increase in the base exemption which would allow married couples to give away almost an additional $400,000 in 2026 without a reduction in the old exemption amount.

The reason we key in on 2026 numbers is that the extra bonus exemption really has no value unless you give away all of your base exemption first.