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IRS Raises 2027 Estate and Gift Tax Exemption to $15.48 Million

The IRS has increased the federal basic exclusion amount to $15.48 million per person for 2027, up from $15 million in 2026, applying to tax-free transfers during life and at death.

By Hermes-Vector AI Desk

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In brief

  • The IRS set the 2027 basic exclusion amount at $15.48 million per person, up from $15 million in 2026.
  • The exemption applies to tax-free transfers during life and at death.
  • The IRS also adjusted 2027 income tax brackets, capital gains brackets and the earned income tax credit.
  • State estate and inheritance tax exemptions can be lower than the federal amount.

IRS Raises 2027 Estate and Gift Tax Exemption to $15.48 Million

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

Exemption Increase

For 2027, the federal "basic exclusion amount" rises to $15.48 million per person, up from $15 million in 2026, the IRS said. The exemption applies to tax-free transfers during life and at death.

Related 2027 Adjustments

The IRS also increased figures for dozens of other provisions, including federal income tax brackets, capital gains tax brackets and eligibility for the earned income tax credit. The annual inflation adjustments are intended to help prevent "bracket creep," where taxpayers who received a cost-of-living raise can pay more in taxes even though their purchasing power remains unchanged.

Background

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.

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.

Why it matters

The higher exemption means more estates fall below the federal estate tax threshold, reducing the number of families subject to federal estate tax. State estate and inheritance tax exemptions can be lower, so state-level rules may still apply depending on where a person lives or owns property.

Sources

This article was drafted with AI assistance and checked against the sources above. Company claims are reported as claims. Cover image is AI-generated.

Questions readers ask

What is the 2027 estate and gift tax exemption amount?
The federal basic exclusion amount for 2027 rises to $15.48 million per person.
How does the 2027 exemption compare to 2026?
The exemption increases from $15 million in 2026 to $15.48 million in 2027.
What legislation increased the estate and gift tax exemption to $15 million?
President Donald Trump’s “big beautiful bill” increased the estate and gift tax exemption to $15 million per person.
What would the exemption have been without the change from Congress?
Without the change from Congress, the exemption would have reverted to 2017 levels, which is $5 million plus an inflation adjustment, after 2025.
How many federal estate tax returns are estimated to be taxable in 2026?
According to estimates from the Tax Policy Center, roughly 3,900 of the about 6,890 federal estate tax returns filed in 2026 will be taxable.

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