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The IRS recently released Revenue Procedure 2023-34, which outlines the annual inflation adjustments to various Internal Revenue Code provisions, including the estate, gift, and generation-skipping transfer (GST) tax exemption amounts, the gift tax annual exclusion, and the estate and trust income tax rates. The adjustments will be effective for the 2024 tax year. These figures are adjusted annually for cost-of-living increases.
Below is a summary of the 2024 figures. You can read Rev. Proc. 2023-34 here.
Estate tax: Generally, a person dying between Jan. 1 and Dec. 31, 2024, may be subject to an estate tax, with an applicable exclusion amount of $13.61 million (increased from $12.92 million in 2023). The top marginal rate remains 40 percent.
Gift tax: The lifetime gift tax exemption amount for gifts made in 2024 increased to $13.61 million ($12.92 million in 2023). While this year’s exemption amount increased as in years past, that number is set to be likely cut half in 2026. The top marginal rate remains 40 percent.
Gift tax Annual exclusion: In 2024, the gift tax annual exclusion amount increased to $18,000 ($17,000 in 2023). The annual exclusion for gifts made to noncitizen spouses in 2024 is $185,000 (increased from $175,000 in 2023).
GST tax: The GST tax exemption amount, which can be applied to generation-skipping transfers (including those in trust) during 2024, is now $13.61 million ($12.92 million in 2023). The rate remains 40 percent.
Income tax: The tax rate schedule for estates and trusts in 2024 is as follows:
|
If the taxable income is: |
The tax is: |
|
Not over $3,100 |
10 percent of taxable income |
|
Over $3,100 but not over $11,150 |
$310 plus 24% of the excess over $3,100 |
|
Over $11,150 but not over $15,200 |
$2,242 plus 35% of the excess over $11,150 |
|
Over $15,200 |
$3,659.50 plus 37% of the excess over $15,200 |
For more information about what these changes mean for you, please reach out to our Trusts & Estates group.