The Internal Revenue Service has released Rev. Proc. 2023-34, 2023-48 IRB ___ (11/24/2023), with inflation adjustments for 2023 and, consistent with earlier predictions (with two exceptions), the changes in the most significant federal estate and trust planning numbers will be as follows:

• The federal estate tax base applicable exclusion amount (and generation-skipping tax exemption) will be $13,610,000 (was $12,920,000 for 2023).
• The annual gift tax exclusion will be $18,000 (was $17,000).
• The annual gift tax exclusion for a non-citizen spouse will be $185,000 (was $175,000).
• The “2 percent” amount for purposes of section 6166 will be $1,850,000 (was $1,750,000).
• The limitation on the special use valuation reduction under section 2032A will be $1,390,000¹ (was $1,310,000).
• The top (37%) income tax bracket for estates and trusts will begin at $15,200 (was $14,450), and the maximum rate on capital gains will begin at $15,450 (was $14,650).
• The alternative minimum tax exemption for estates and trusts will be $29,900 (was $28,400), and the phaseout of the exemption will start at $99,700² (was $94,600).

Notes:

1. Earlier prediction had been $1,380,000 for the limit on special use valuation. ↩︎
2. Earlier prediction had been $99,650 for the phaseout of the alternative minimum tax exemption. ↩︎