Official Inflation Adjustments for 2023

The Internal Revenue Service has released Rev. Proc. 2022-38 with inflation adjustments for 2023 and, consistent with earlier predictions, 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 $12,920,000 (was $12,060,000 for 2022).
  • The annual gift tax exclusion will be $17,000 (was $16,000).
  • The annual gift tax exclusion for a non-citizen spouse will be $175,000 (was $164,000).
  • The “2 percent” amount for purposes of section 6166 will be $1,750,000 (was $1,640,000).
  • The limitation on the special use valuation reduction under section 2032A will be $1,310,000 (was $1,230,000).
  • The top (37%) income tax bracket for estates and trusts will begin at $14,450 (was $13,450).
  • The alternative minimum tax exemption for estates and trusts will be $28,400 (was $26,500), and the phaseout of the exemption will start at $94,600 (was $88,300).
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