The Bureau of Labor Statistics has published the Chained Consumer Price Index (C-CPI-U) for August 2024, and so it’s possible to calculate various inflation adjustments for 2025. The following are the significant federal estate planning numbers calculated for 2025, with the numbers for 2024 shown in parentheses:
- The federal estate tax base applicable exclusion amount (and generation-skipping tax exemption) will be $13,990,000 (was $13,610,000 for 2024).
- The annual gift tax exclusion will be $19,000 (was $18,000).
- The annual gift tax exclusion for a non-citizen spouse will be $190,000 (was $185,000).
- The “2 percent” amount for purposes of section 6166 will be $1,900,000 (was $1,850,000).
- The limitation on the special use valuation reduction under section 2032A will be $1,420,000 (was $1,390,000).
- The top (37%) income tax bracket for estates and trusts will begin at $15,650 (was $15,200).
- The alternative minimum tax exemption for estates and trusts will be $30,700 (was $29,900), and the phaseout of the exemption will start at $102,450 (was $99,700).
The Internal Revenue Service will publish the official inflation adjustments in a Revenue Procedure that will probably appear in 4-8 weeks.
[9/22/2024 Update]: Practitioners may also wish to know that the limit on qualified charitable distributions from individual retirement accounts under I.R.C. § 408(d)(8), which had been $100,000 in 2023 and $105,000 in 2024, should become $108,000 in 2025.
