With the release of the Consumer Price Index for August 2017, it’s possible to calculate various inflation adjustments for 2018. The following are the significant federal estate planning numbers, with the numbers for 2017 shown in parentheses:
- The base applicable exclusion amount (and generation-skipping tax exemption) will be $5,600,000 (was $5,490,000 for 2017).
- The annual gift tax exclusion will be $15,000 (was $14,000).
- The annual gift tax exclusion for a non-citizen spouse will be $152,000 (was $149,000).
- The “2 percent” amount for purposes of section 6166 will be $1,520,000 (was $1,490,000).
- The limitation on the special use valuation reduction under section 2032A will be $1,140,000 (was $1,120,000).
- The top (39.6%) income tax bracket for estates and trusts will begin at $12,700 (was $12,500).
- The alternative minimum tax exemption for a estates and trusts will be $24,600 (was $24,100).
The Internal Revenue Services will publish the official inflation adjustments in a Revenue Procedure in 4-8 weeks.