With the release of the Consumer Price Index for August 2016, it’s possible to calculate various inflation adjustments for 2017. The following are the significant federal estate planning numbers:
- The base applicable exclusion amount (and generation-skipping tax exemption) will be $5,490,000.
- The annual gift tax exclusion will be $14,000 (i.e., no change).
- The annual gift tax exclusion for a non-citizen spouse will be $149,000.
- The “2 percent” amount for purposes of section 6166 will be $1,490,000.
- The limitation on the valuation reduction under section 2032A will be $1,120,000.
- The top (39.6%) income tax bracket for estates and trusts will begin at $12,500.
- The alternative minimum tax exemption for an estates and trusts will be $24,100.