Unofficial Inflation Adjustments for 2021

With the release of the Chained Consumer Price Index (C-CPI-U) for August 2020, it’s possible to calculate various inflation adjustments for 2021. The following are the significant federal estate planning numbers, with the numbers for 2020 shown in parentheses:

  • The base applicable exclusion amount (and generation-skipping tax exemption) will be $11,700,000 (was $11,580,000 for 2020).
  • The annual gift tax exclusion will be $15,000 (unchanged).
  • The annual gift tax exclusion for a non-citizen spouse will be $159,000 (was $157,000).
  • The “2 percent” amount for purposes of section 6166 will be $1,590,000 (was $1,570,000).
  • The limitation on the special use valuation reduction under section 2032A will be $1,190,000 (was $1,180,000).
  • The top (37%) income tax bracket for estates and trusts will begin at $13,050 (was $12,950).
  • The alternative minimum tax exemption for estates and trusts will be $25,700 (was $25,400), and the phaseout of the exemption will start at $85,650 (was $84,800).

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

Print Friendly, PDF & Email

Comments are closed.