Inflation Adjustments for 2019

With the release of the Chained Consumer Price Index (C-CPI-U) for August 2018, it’s possible to calculate various inflation adjustments for 2019. The following are the significant federal estate planning numbers, with the numbers for 2018 shown in parentheses:

  • The base applicable exclusion amount (and generation-skipping tax exemption) will be $11,400,000 (was $11,180,000 for 2018).
  • The annual gift tax exclusion will be $15,000 (was $15,000, so unchanged).
  • The annual gift tax exclusion for a non-citizen spouse will be $155,000 (was $152,000).
  • The “2 percent” amount for purposes of section 6166 will be $1,550,000 (was $1,520,000).
  • The limitation on the special use valuation reduction under section 2032A will be $1,160,000 (was $1,140,000).
  • The top (37%) 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 $25,000 (was $24,600), and the phaseout of the exemption will start at $83,500 (was $81,900).

The Internal Revenue Service will publish the official inflation adjustments in a Revenue Procedure in 4-8 weeks.

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