Official 2027 figures confirmed. Checked November 12, 2026. Read the primary source. Tax-year amounts apply to 2027, not 2026 returns filed during 2027.
Federal gift exclusion, return filing and tax are different
1. Annual excluded gifts
$20,000 per donor per recipient generally covers qualifying present-interest gifts. A gift over that amount does not automatically produce tax, but filing can be required.
2. Lifetime exclusion use
Taxable gifts can use part of the $15.48 million 2027 basic exclusion. Prior taxable gifts and any deceased-spousal unused exclusion matter.
3. Estate and GST
Estate tax is a separate filing and calculation process. A couple does not automatically get $30.96 million: portability needs an effective election and assumptions. GST exemption is not portable.
| Situation | Federal filing / qualification check |
|---|---|
| Ordinary present-interest gift within exclusion | Generally excluded; special gifts or other reportable transfers can still require Form 709. |
| Gift above annual exclusion | Form 709 generally reports the taxable gift; available lifetime exclusion may mean no current gift tax. |
| Spouses elect gift splitting | Consent and Form 709 rules apply; do not assume doubling the exclusion removes filing. |
| Direct tuition or medical payment | Qualifying payments must be made directly as required. Tuition does not include books, room or board; a reimbursement is not the same exclusion. |
| Portability after a spouse dies | A timely and complete Form 706 election is generally required; limited relief may apply. Estate and GST rules differ. |
Federal-only amounts. State estate or inheritance taxes can apply at much lower levels and have different rules. Trust design, retained rights, ownership, valuation and administration determine outcomes; an acronym alone does not establish exclusion.
Form 709 instructions · Form 706 instructions
Printable records checklist
- Gifts by donor, recipient, date, value and present-interest status.
- Prior Forms 709 and remaining exemption, not just the current annual amount.
- Appraisals, ownership and direct-payment receipts.
- Spousal citizenship, gift-splitting consent, DSUE election and state domicile.
2027 Estate Tax Exemption (Confirmed)
| Category | 2027 Confirmed | 2026 Confirmed | Statutory Provision |
|---|---|---|---|
| Basic Exclusion Amount (Individual) | $15,480,000 | $15,000,000 | OBBBA § 70106 base plus inflation index |
| Married Couple Exemption (Portability) | $30,960,000 | $30,000,000 | Requires timely DSUE election on Form 706 |
| Applicable Credit Amount (Individual) | $6,137,800 | $5,945,800 | Credit offset against § 2001 tentative tax |
| Top Marginal Estate Tax Rate | 40% | 40% | Applies to taxable estate over $1,000,000 |
Portability: Under IRC § 2010(c)(5), when a married spouse passes away, the deceased spouse's executor can elect portability of any Deceased Spousal Unused Exclusion (DSUE) to the surviving spouse by filing Form 706. This effectively shields up to $30.96 million for the family without requiring complex bypass trusts.
Annual Gift Tax Exclusion (Confirmed)
| Scenario | 2027 Confirmed | 2026 Confirmed | Filing Requirement |
|---|---|---|---|
| Individual gift per recipient | $20,000 | $19,000 | Generally no Form 709 for present-interest gifts at or below limit |
| Married couple (gift-splitting) | $40,000 | $38,000 | Requires Form 709 consent election |
| Gifts to non-citizen spouse | $201,000 | $194,000 | IRC § 2523(i) non-citizen marital exclusion |
The annual gift tax exclusion generally covers present-interest gifts up to the limit per recipient each calendar year without reducing your lifetime exemption. Future-interest gifts and gift-splitting can require Form 709 even below the limit. Direct payments made on behalf of an individual for tuition or qualified medical expenses are exempt without dollar limitation under IRC § 2503(e).
Lifetime Gift & GST Tax Exemption (Confirmed)
| Tax Type | 2027 Confirmed Exemption | 2026 Confirmed | Statutory Top Rate |
|---|---|---|---|
| Estate tax basic exclusion | $15,480,000 | $15,000,000 | 40% |
| Lifetime gift tax exclusion (unified) | $15,480,000 | $15,000,000 | 40% |
| Generation-skipping transfer (GST) tax | $15,480,000 | $15,000,000 | 40% flat |
The GST tax is a separate, additional layer: The generation-skipping transfer tax applies a flat 40% tax — on top of any gift or estate tax otherwise due — to transfers that skip a generation (e.g., grandparents directly to grandchildren). The GST exemption equals the basic estate exemption ($15,480,000 confirmed) and is not portable between spouses. Automatic allocation can apply to qualifying direct and indirect skips; Forms 709 and 706 also allow allocations and relevant elections. Track GST allocations separately from estate/gift exemption usage, since trusts and transfer types can produce different results.
Explore estate-tax and portability scenarios. The calculator currently uses the confirmed 2026 federal exclusion of $15,000,000, rather than this page's confirmed 2027 amount.
Open Calculator (2026 Exclusion) →What Changed From 2026: Side-by-Side Summary
The table below compares final 2027 federal transfer tax thresholds with confirmed 2026 levels under IRS Rev. Proc. 2025-32 and OBBBA statutory adjustments.
| Provision / Threshold | 2026 Confirmed | 2027 Confirmed | Change |
|---|---|---|---|
| Individual Basic Exclusion Amount | $15,000,000 | $15,480,000 | ↑ +$480,000 (+3.2%) |
| Married Couple Exemption (Portability) | $30,000,000 | $30,960,000 | ↑ +$960,000 (+3.2%) |
| Annual Gift Exclusion (Per recipient) | $19,000 | $20,000 | ↑ +$1,000 (+5.3%) |
| Annual Gift Exclusion (Married gift-split) | $38,000 | $40,000 | ↑ +$2,000 (+5.3%) |
| Gifts to Non-Citizen Spouse | $194,000 | $201,000 | ↑ +$7,000 (+3.6%) |
| GST Tax Lifetime Exemption | $15,000,000 | $15,480,000 | ↑ +$480,000 (+3.2%) |
| Top Estate, Gift & GST Tax Rate | 40% | 40% | — Top rate unchanged |
2026 vs 2027 Lifetime Estate Tax Exemption
| Metric | 2026 | 2027 Confirmed |
|---|---|---|
| Single Exemption ($M) | 15 | 15.48 |
| MFJ Exemption ($M) | 30 | 30.96 |
Worked Example: Portability + Annual Gifting on a $35M Estate
Consider Arthur and Eleanor, a married couple with a combined estate valued at $35,000,000. They have 2 children and 2 grandchildren (4 heirs), are both U.S. citizens, and have no prior taxable gifts. For this simplified five-year model, both spouses survive the gifting period and we hold the illustrative $20,000 annual exclusion and $15,480,000 basic exclusion constant. This is not a forecast of future-year limits; ignore investment growth, spending, state taxes, and administrative deductions:
- Annual Exclusion Gifting Plan: Together, Arthur and Eleanor gift $40,000 per heir each year ($20,000 × 2 donors × 4 recipients = $160,000/year). Over 5 years, they transfer $800,000 tax-free with zero impact on their lifetime exemption.
- First Spouse Passes Away: After the five-year gifting period, when Arthur passes away, all assets pass to Eleanor under the unlimited marital deduction (no estate tax owed). Arthur's executor files Form 706 to elect portability, capturing Arthur's full $15,480,000 DSUE.
- Surviving Spouse Estate Exemption: Holding her own exclusion at the assumed $15,480,000, Eleanor adds Arthur's $15,480,000 DSUE for a total $30,960,000. DSUE itself is not inflation-indexed after Arthur's death, although Eleanor's own exclusion may change under actual future law.
- Final Estate Tax Calculation: Assuming the remaining estate is $34,200,000 at Eleanor's death:
Taxable Amount Above Exemption: $34,200,000 – $30,960,000 = $3,240,000.
Estate Tax Owed (40%): $3,240,000 × 40% = $1,296,000.
Result: With no gifting and no portability election, Eleanor would still retain her own $15,480,000 exclusion: ($35,000,000 − $15,480,000) × 40% = $7,808,000. The illustrated plan reduces that tax to $1,296,000, a saving of $6,512,000. Of that, $6,192,000 comes from portability and $320,000 from the $800,000 of annual-exclusion gifts. The exclusion is available under law; the saving depends on this comparison's assumptions.
Who This Affects — and Who It Doesn't
- High Net Worth Estates ($15M+ single / $30M+ married): Subject to federal estate tax and lifetime gift monitoring.
- Affluent Families Gifting to Heirs: Qualifying present-interest gifts up to $20,000 per donor/recipient generally need no Form 709; gift splitting and other special cases can require filing.
- Surviving Spouses: The deceased spouse's executor files Form 706 to preserve unused exemption (DSUE).
- Dynasty Trust Grantors: Can allocate up to $15.48M of GST exemption to multi-generational trusts.
- Estates Within Their Available Exclusion: Many owe no federal estate tax. Prior taxable gifts reduce remaining exclusion; a couple does not automatically receive double the individual amount without proper planning or portability.
- Spousal Transfers between U.S. Citizens: Unlimited marital deduction shields 100% of inter-spousal transfers.
- Charitable Gifts & Bequests: Qualifying charitable transfers can be deductible under IRC § 2055; recipient and transfer requirements apply.
- Direct Tuition & Medical Payments: Exempt from gift tax regardless of amount.
Key Estate Planning Strategies for 2027
1. Timely Portability Filing: The deceased spouse's executor normally files Form 706 within 9 months of death, with a possible 6-month extension. If the estate was not otherwise required to file, Rev. Proc. 2022-32 offers eligible estates simplified late-portability relief by the fifth anniversary of death. Check its conditions before relying on relief; a required estate-tax return has different rules.
2. Superfunding 529 College Plans: A Form 709 election can spread a qualifying 529 contribution over five years. The $20,000 annual exclusion supports $100,000 per donor, or $200,000 for a couple. Account for other gifts to that beneficiary during the five years; amounts above available annual exclusions use lifetime exemption or incur gift tax.
3. Irrevocable Trusts & SLATs: Transfer high-growth assets into Spousal Lifetime Access Trusts (SLATs) or Grantor Retained Annuity Trusts (GRATs) to remove future appreciation from your taxable gross estate.
Sources: IRS Rev. Proc. 2026-35, sections 3.44 and 3.46, for final 2027 estate and gift exclusions; Form 709 instructions for filing and gift-splitting rules; Form 706 instructions for estate returns; and Rev. Proc. 2022-32 for qualifying late portability relief. The multi-year illustration freezes 2027 amounts and is not a prediction of future limits.
Frequently Asked Questions
What is the final 2027 federal estate tax exemption?
The basic exclusion is $15,480,000 per individual. A couple with two fully available exclusions can have $30,960,000 in this simplified same-year comparison, but prior taxable gifts and portability requirements matter. A spouse does not automatically receive a doubled exclusion.
How much can I give under the annual exclusion in 2027?
The annual exclusion is $20,000 per donor, per recipient for qualifying present-interest gifts. Two spouses can potentially give $40,000; gift splitting can require Form 709 returns and consent. Exceeding the annual exclusion often uses available lifetime exclusion rather than immediately creating tax, but filing requirements still apply.
What is the 2027 generation-skipping transfer exemption?
The 2027 GST exemption is $15,480,000. It is separate from estate/gift exclusion allocation and is not portable between spouses. Whether GST tax applies depends on the transfer, skip-person rules, allocations and inclusion ratio, not simply the size of one gift.
How does spousal portability work under IRC § 2010(c)(5)?
The deceased spouse's executor elects portability on Form 706 so the surviving spouse can use the deceased spouse's unused exclusion (DSUE), even if the estate is below the normal filing threshold. DSUE is not later inflation-indexed and the GST exemption is not portable. Qualifying estates not otherwise required to file may use the five-year late-election procedure in Rev. Proc. 2022-32.
What is the top federal estate and gift tax rate in 2027?
The top federal marginal estate, gift, and GST tax rate is 40% on taxable amounts exceeding the basic exclusion threshold.
What is the 2027 annual exclusion for gifts to a noncitizen spouse?
The final special annual exclusion is $201,000 for qualifying gifts to a spouse who is not a U.S. citizen, compared with $194,000 in 2026. The unlimited marital deduction does not generally apply to such gifts; the special exclusion has its own requirements.
What is the anti-clawback rule (Treas. Reg. § 20.2010-1)?
Current regulations protect certain completed gifts that used a higher basic exclusion when estate tax is later computed using a lower exclusion. They do not guarantee what future Congresses will enact or cover every arrangement that remains includible in the estate. Evaluate the actual transfer and retained interests before relying on the rule.
Do direct payments for medical care or college tuition count against the annual gift limit?
No. Under IRC § 2503(e), qualifying tuition paid directly to an eligible educational institution and qualifying unreimbursed medical expenses paid directly as required can be excluded without using the annual gift exclusion. Reimbursements, room and board, books and other non-tuition costs do not automatically qualify.
How does the step-up in basis work for inherited assets?
Inherited assets generally receive a fair-market-value basis at death under IRC § 1014, which can mean a step-up or a step-down. Alternate valuation and statutory exceptions apply. Income in respect of a decedent, such as taxable inherited retirement-account distributions, does not receive this basis adjustment.
When is an estate required to file IRS Form 706 in 2027?
For a U.S. citizen or resident, an executor generally must file if the gross estate plus adjusted taxable gifts and any specific exemption exceeds the basic exclusion ($15,480,000 for 2027). The normal deadline is 9 months after death, with a possible 6-month extension. A below-threshold estate can file to elect portability; eligible estates may qualify for five-year late-election relief under Rev. Proc. 2022-32.
Do life insurance proceeds count toward the gross estate?
Proceeds can be included if payable to the estate or if the deceased retained incidents of ownership. Transferring an existing policy within three years of death can also cause inclusion. An ILIT can keep proceeds outside the estate only when ownership, beneficiary, transfer-timing, and other requirements are met; the trust label alone is insufficient.
Do individual states impose their own estate or inheritance taxes?
Yes. Over a dozen states (such as NY, MA, WA, OR, IL) impose separate state estate or inheritance taxes with much lower exemption thresholds (ranging from $1M to $7M) and no automatic portability.
What is a Spousal Lifetime Access Trust (SLAT)?
A SLAT is an irrevocable trust created by one spouse for the benefit of the other spouse, removing assets and future appreciation from the taxable estate while maintaining indirect access to trust distributions.
What is the unified applicable credit amount for 2027?
The applicable credit amount corresponding to the confirmed $15,480,000 basic exclusion is approximately $6,137,800, which offsets the tentative tax computed on the first $15.48M of transfers.
When were the official 2027 estate and gift limits released?
The IRS published the final 2027 inflation adjustments on November 5, 2026 in Rev. Proc. 2026-35. The basic exclusion is $15,480,000, annual gift exclusion $20,000, and qualifying noncitizen-spouse gift exclusion $201,000.
Can 529 plan contributions be front-loaded under gift tax rules?
Yes. Under 5-year gift-tax averaging (superfunding), a contributor can elect to front-load 5 years' worth of annual exclusions in a single year (up to $100,000 per donor, or $200,000 for married couples electing gift-splitting) without reducing lifetime exemption, provided other gifts do not exceed the remaining exclusions for those years.
Model estate and gift planning with the calculator's 2026 federal exclusion. Use this page for the official 2027 amounts; the linked calculator has not been upgraded to those amounts.
Launch Calculator (2026 Exclusion) →Explore All 2027 Reference Hubs
How this page is reviewed
See methodology, assumptions & sources
| Risk tier | High YMYL |
|---|---|
| Author | Calculover Editorial Team Finance and legal education |
| Editorial owner | Calculover Tax & Payroll Desk Tax and wage methodology owner |
| Reviewer | Calculover Editorial Review High-risk source and limitation review |
| Status | Confirmed |
| Source as of | 2026-11-12 |
| Last reviewed | 2026-11-12 |
| Last verified | 2026-11-12 |
| Next review date | 2027-01-04 |
| Expected release | Final 2027 annual figures published. |
| Projection method | Final 2027 core figures come from the cited IRS or SSA release. Prior-year comparisons remain labeled; no uniform inflation multiplier is used. Any retirement or Medicare scenario is identified separately. |
| Data effective date | 2027-01-01 |
Methodology
Final 2027 core figures come from the cited IRS or SSA release. Prior-year comparisons remain labeled; no uniform inflation multiplier is used. Any retirement or Medicare scenario is identified separately.
Assumptions
- This is a reference article with fixed worked examples. Assumptions are stated beside each example; the page does not collect or verify personal financial inputs.
- Agency estimates and editorial scenarios are labeled separately from confirmed rules and must not be treated as final 2027 filing amounts.
- Linked calculators may support a different tax year; their displayed year and assumptions control their results.
Limitations
- The examples do not determine an individual’s final liability, benefit, eligibility or optimal financial decision. State rules and personal circumstances may change the result.
- Check the current primary-source release and applicable year before making a contribution, filing a return, or changing benefits.
Sources
- Official 2027 tax adjustments - Rev. Proc. 2026-35, Internal Revenue Service
- 2026 federal tax baselines — Rev. Proc. 2025-32, Internal Revenue Service
- Estate tax return instructions, Internal Revenue Service
- Simplified portability relief — Rev. Proc. 2022-32, Internal Revenue Service
Professional guidance: 2027 Estate & Gift Tax Exemptions (Confirmed) is for tax education and planning only and is not tax, legal, accounting, or filing advice. Verify current rules with the relevant tax authority or a qualified tax professional.