The Internal Revenue Service has increased the federal basic exclusion amount for estate and gift taxes to $15.48 million per person starting in 2027, representing an adjustment from the current 2026 level of $15 million. This exemption determines the threshold for tax-free transfers of wealth both during a person’s lifetime and upon their death.
The agency’s announcement, made Thursday, also encompasses inflation adjustments to numerous other tax provisions applicable for the coming year. These modifications include changes to federal income tax brackets, capital gains tax brackets, and income eligibility thresholds for various credits and deductions. State-level estate and inheritance tax exemptions may differ from the federal figure and could impose lower thresholds in certain jurisdictions.
The current exemption amount reflects changes implemented through legislation signed by President Donald Trump that set the estate and gift tax exemption at $15 million per person. Prior to this legislative action, the exemption was set to decline to 2017 levels—approximately $5 million adjusted for inflation—following the conclusion of 2025. This prospect prompted significant estate planning activity among wealthy families seeking to maximize tax-advantaged transfers before any potential reduction took effect.
Despite the substantial exemption amounts, federal estate taxes affect a limited portion of the population. Tax Policy Center estimates indicate that for 2026, approximately 6,890 federal estate tax returns will be filed, with roughly 3,900 returns expected to carry tax liability. The inflation adjustments announced for 2027 occur amid broader national discussions regarding affordability pressures, as households continue to manage increased expenses across housing, food, energy and other consumer categories.
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