IRS announces bigger estate and gift tax exemption for 2027

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The Internal Revenue Service has announced a higher estate and gift tax exemption for 2027.

In its announcement Thursday, the agency increased the federal "basic exclusion amount" to $15.48 million per person for 2027, up from $15 million in 2026. The exemptions apply to tax-free transfers during life and at death.

State estate and inheritance tax exemptions can be lower.

The IRS also increased figures for dozens of other provisions, including federal income tax brackets, the capital gains tax brackets and eligibility for the earned income tax credit, among others.

The inflation adjustments for 2027 come as Americans wrestle with affordability amid the rising cost of housing, groceries, gasoline and other living expenses. 

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President Donald Trump's "big beautiful bill" increased the estate and gift tax exemption to $15 million per person. Without the change from Congress, the exemption would have reverted to 2017 levels — $5 million plus an inflation adjustment — after 2025, which spurred proactive estate planning from ultra-wealthy families before the legislation.

Under current law, few families are subject to federal estate taxes. For 2026, families will file about 6,890 federal estate tax returns, and roughly 3,900 will be taxable, according to estimates from the Tax Policy Center, a think tank.