The IRS has announced the estate and gift tax exclusions for 2023.

The estate tax exclusion has increased from $12.06 million per person in 2022, to $12.92 million per person in 2023. As a result, an individual’s combined transfers during their lifetime and at their death will be free from estate taxes if less than $12.92 million.

The annual gift tax exclusion has increased from $16,000 in 2022 to $17,000 in 2023.  Annual gifts by an individual of less than $17,000 per donee will pass free of gift taxes.  Any transfers that exceed $17,000 will require the donor to file a gift tax return (Form 709).  As a result, the amount gifted and reported on Form 709 will count against the donor’s estate tax exemption.

These amounts are adjusted annually for inflation.

Please keep in mind that the estate tax exemption is set to sunset at the end of 2026.  As a result, the estate tax exemption is expected to decrease to about $7 million per person.

Should you have any questions regarding this IRS update, please contact admin@tchiulaw.com to coordinate a brief call.