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2021 Federal gift and estate tax exemption

Posted Nov 02, 2020

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The 2021 federal gift and estate tax exemption will be increasing by $120,000 to $11,700,000. The amount currently is $11,580,000. The Tax Cuts and Jobs Act doubled the exemption base amount from $5 million to $10 million, with the amount indexed for inflation. Be aware that although the doubled amount will continue to be adjusted annually for inflation, it expires after 2025. Without further legislation, the gift and estate tax exemption will return to an inflation-adjusted $5 million in 2026. The annual gift tax exclusion remains at $15,000 per recipient for 2021. It’s adjusted only in $1,000 increments, so it typically increases only every few years. It increased to $15,000 in 2018.

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