The IRS has announced the inflation adjustments for the estate and gift tax exclusion, the generation-skipping transfer tax exemption, the gift tax exclusion and other estate planning numbers for 2020.
The estate and gift tax exclusion amounts will be $11,580,000. This year, it is $11,400,000, so that is an increase of $180,000. The generation-skipping transfer (GST) tax exemption is also going to be $11,580,000.
Non-citizens are treated differently. There is no unlimited marital deduction. For gifts made in 2020, the exclusion for gifts to a non-citizen spouse will be $157,000.
The annual gift tax exclusion remains the same in 2020 as it has been this year, that is, $15,000 per donor per donee per calendar year.
Trust and estate income tax rate brackets have also been announced. The 37% tax bracket starts at amounts over $12,950. At that level, the tax is $3,129 plus 37% of the excess over $12,950. For the lower income tax brackets, where the income is less than $2,600, the tax is 10% of taxable income. If the taxable income is over $2,600 but not over $9,450, the tax is $260 plus 24% of the excess over $2,600. If the taxable income is over $9,450 but not over $12,950, the tax is $1904 plus 35% of the excess over $9,450.