The Bureau of Labor Statistics has published the Chained Consumer Price Index (C-CPI-U) for August 2026, and so it should be possible to calculate various inflation adjustments for 2027. However, there is an uncertainty in the calculations this year, because no C-CPI-U value has been published for October 2025, when the federal government was shut down due to a budget impasse. With values for only 11 months, how is the average calculated for the year?  It could be an average of the 11 months for which a value is available.  Or there could be some attempt to “smooth” the average for the year by making an assumption about the value for October.  Which approach is used makes a difference, because leaving out a value for October lowers the average inflation when the value early in the 12 month period are lower than the values later in the period.

The relevant statute (I.R.C. § 1(f)(6)(B)) refers to “the average of the C-CPI-U as of the close of the 12-month period” ending on August 31, which suggests that the intention is to average the entire year, and not just 11 of the 12 months.  So, in the absence of any regulatory guidance or any example of any previous calculation with a missing index value, it has been assumed that something should be done to fill in the gap for October.  An average has therefore been calculated using a value for October that is an interpolation of September and November (i.e., the average of September and November).

The following are the significant federal estate planning numbers that have been calculated for 2027 in this way, with the numbers for 2026 are shown in parentheses.

• The federal estate tax base applicable exclusion amount (and generation-skipping tax exemption) should be $15,470,000 (had been $15,000,000 for 2026).
• The annual gift tax exclusion should remain at $20,000 (was $19,000 for 2026).
• The annual gift tax exclusion for a non-citizen spouse should be $200,000 (was $194,000).
• The “2 percent” amount for purposes of section 6166 should be $2,000,000 (was $1,940,000).
• The limitation on the special use valuation reduction under section 2032A should be $1,500,000 (was $1,460,000).
• The top (37%) income tax bracket for estates and trusts should begin at $16,500 (was $16,000).
• The alternative minimum tax exemption for estates and trusts should be $32,400 (was $31,400), and the phaseout of the exemption shouldstart at $108,050 (was $104,800).

The Internal Revenue Service will publish the official inflation adjustments for 2027 in a Revenue Procedure that will probably appear in 4-8 weeks.