2027 Estate Tax Exemption (Projected)
| Category | 2027 Projected | 2026 Confirmed | Statutory Provision |
|---|---|---|---|
| Basic Exclusion Amount (Individual) | ~$15,450,000 | $15,000,000 | OBBBA § 70106 base plus inflation index |
| Married Couple Exemption (Portability) | ~$30,900,000 | $30,000,000 | Requires timely DSUE election on Form 706 |
| Applicable Credit Amount (Individual) | ~$6,125,800 | $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 ~$30.9 million for the family without requiring complex bypass trusts.
Annual Gift Tax Exclusion (Projected)
| Scenario | 2027 Projected | 2026 Confirmed | Filing Requirement |
|---|---|---|---|
| Individual gift per recipient | ~$19,000–$20,000 | $19,000 | Generally no Form 709 for present-interest gifts at or below limit |
| Married couple (gift-splitting) | ~$38,000–$40,000 | $38,000 | Requires Form 709 consent election |
| Gifts to non-citizen spouse | ~$200,000 | $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 (Projected)
| Tax Type | 2027 Projected Exemption | 2026 Confirmed | Statutory Rate |
|---|---|---|---|
| Estate tax basic exclusion | ~$15,450,000 | $15,000,000 | 40% |
| Lifetime gift tax exclusion (unified) | ~$15,450,000 | $15,000,000 | 40% |
| Generation-skipping transfer (GST) tax | ~$15,450,000 | $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 (~$15,450,000 projected) 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 projected 2027 amount.
Open Calculator (2026 Exclusion) →What Changed From 2026: Side-by-Side Summary
The table below compares projected 2027 federal transfer tax thresholds with confirmed 2026 levels under IRS Rev. Proc. 2025-32 and OBBBA statutory adjustments.
| Provision / Threshold | 2026 Confirmed | 2027 Projected | Change |
|---|---|---|---|
| Individual Basic Exclusion Amount | $15,000,000 | ~$15,450,000 | ↑ +$450,000 (+3.0%) |
| Married Couple Exemption (Portability) | $30,000,000 | ~$30,900,000 | ↑ +$900,000 (+3.0%) |
| Annual Gift Exclusion (Per recipient) | $19,000 | ~$19,000–$20,000 | — Holds or +$1,000 |
| Annual Gift Exclusion (Married gift-split) | $38,000 | ~$38,000–$40,000 | — Holds or +$2,000 |
| Gifts to Non-Citizen Spouse | $194,000 | ~$200,000 | ↑ +$6,000 (+3.1%) |
| GST Tax Lifetime Exemption | $15,000,000 | ~$15,450,000 | ↑ +$450,000 (+3.0%) |
| Top Estate, Gift & GST Tax Rate | 40% | 40% | — Flat 40% |
2026 vs 2027 Lifetime Estate Tax Exemption
| Metric | 2026 | 2027 Projected |
|---|---|---|
| Single Exemption ($M) | 15 | 15.45 |
| MFJ Exemption ($M) | 30 | 30.9 |
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 $15,450,000 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 $15,450,000 DSUE.
- Surviving Spouse Estate Exemption: Holding her own exclusion at the assumed $15,450,000, Eleanor adds Arthur's $15,450,000 DSUE for a total $30,900,000. 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 – $30,900,000 = $3,300,000.
Estate Tax Owed (40%): $3,300,000 × 40% = $1,320,000.
Result: With no gifting and no portability election, Eleanor would still retain her own $15,450,000 exclusion: ($35,000,000 − $15,450,000) × 40% = $7,820,000. The illustrated plan reduces that tax to $1,320,000, a saving of $6,500,000. Of that, $6,180,000 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: Can transfer ~$20,000/recipient annually without filing Form 709.
- Surviving Spouses: The deceased spouse's executor files Form 706 to preserve unused exemption (DSUE).
- Dynasty Trust Grantors: Can allocate up to ~$15.45M 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: 100% deductible from gross estate under IRC § 2055.
- 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 $19,000–$20,000 annual-exclusion scenario supports $95,000–$100,000 per donor, or $190,000–$200,000 for a couple. Confirm the official limit before funding and 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.
Source: IRS Rev. Proc. 2025-32 § 4.42 (annual gift exclusion) and OBBBA § 70106 amending IRC § 2010(c)(3), which set the 2026 basic exclusion amount. See IRS OBBBA provisions. These 2027 figures are roughly 3% planning scenarios rather than a reproduction of the IRS indexing formula; official IRS amounts are expected in autumn 2026. See Form 709 instructions for gift and GST allocation rules, Rev. Proc. 2022-32 for late portability relief, and IRS estate and gift tax FAQs for anti-clawback guidance.
Frequently Asked Questions
What is the projected 2027 federal estate tax exemption?
The 2027 federal estate tax exemption is projected at approximately $15,450,000 per individual, applying ~3% inflation indexing to the $15,000,000 base set for 2026 under OBBBA. Married couples can effectively shield approximately $30,900,000 through spousal portability.
How much can I gift tax-free in 2027 without using my lifetime exemption?
The projected 2027 annual gift tax exclusion is approximately $19,000–$20,000 per recipient per year. Married couples who elect gift-splitting on Form 709 can give $38,000–$40,000 per recipient completely tax-free.
What is the projected 2027 generation-skipping transfer (GST) tax exemption?
The 2027 GST tax exemption is projected at approximately $15,450,000, matching the lifetime basic exclusion amount. Transfers subject to GST tax above this threshold are taxed at a flat 40% rate.
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 projected 2027 annual exclusion for gifts to a non-citizen spouse?
Because transfers to non-U.S. citizen spouses do not qualify for the unlimited marital deduction, the special annual gift exclusion for non-citizen spouses is projected at approximately $200,000 for 2027 (up from $194,000 in 2026).
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), tuition paid directly to an educational institution or medical expenses paid directly to healthcare providers are exempt from gift tax with no dollar limitation.
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 ($15,450,000 in this scenario). 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 projected $15,450,000 basic exclusion is approximately $6,125,800, which offsets the tentative tax computed on the first $15.45M of transfers.
When will official 2027 estate and gift tax limits be released?
The IRS publishes official Revenue Procedure figures in October or November of 2026 based on the Chained CPI-U index calculation.
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 $95,000–$100,000 per donor, or $190,000–$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's separate 2027 scenario for forward planning until official amounts are released.
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 | Projection |
| Source as of | 2026-09-07 |
| Last reviewed | 2026-09-07 |
| Last verified | 2026-09-07 |
| Next review date | 2026-11-15 |
| Expected release | IRS 2027 estate and gift figures: October–November 2026 |
| Projection method | The $15.45 million exclusion is a 3% planning scenario from the enacted $15 million 2026 baseline. Annual gift amounts are scenarios pending IRS publication. The five-year example explicitly freezes its illustrative limits and excludes growth and prior taxable gifts; it is not a prediction of future estate tax. |
| Data effective date | 2027-01-01 |
Methodology
The $15.45 million exclusion is a 3% planning scenario from the enacted $15 million 2026 baseline. Annual gift amounts are scenarios pending IRS publication. The five-year example explicitly freezes its illustrative limits and excludes growth and prior taxable gifts; it is not a prediction of future estate tax.
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
- 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 (Projected) 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.