Official Inflation Adjustments for 2019

The Internal Revenue Service has released Rev. Proc. 2018-57, 2018-49 I.R.B. ___ (12/3/2018), with the official inflation adjustments for 2019.  The published adjustments for income taxes differ in many cases from the inflation adjustments that were published here in September, after the release of the Chained Consumer Price Index (C-CPI-U) for August 2018, but the estate and gift tax numbers turned out as predicted.

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 $12,750 (was $12,500).
  • The maximum zero rate amount for capital gains for estates and trusts will be $2,650, and the maximum 15-percent rate amount will be $12,950.
  • 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).


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