IRS Raises 2027 Estate Tax Exclusion to $15.48 Million and Gift Exclusion to $20,000

On November 5, 2026, the Internal Revenue Service announced the tax year 2027 annual inflation adjustments for nearly 70 tax provisions in IR-2026-133. The dollar amounts appear in Revenue Procedure 2026-35. The tax year 2027 figures generally apply to returns filed in 2028.

For estates, gifts, and generation-skipping transfers, the procedure sets a basic exclusion amount of $15,480,000 for calendar year 2027 and an annual gift tax exclusion of $20,000. Those figures affect federal transfer-tax calculations used in estate planning.

Estate Tax Basic Exclusion and Gift Annual Exclusion for 2027

Under section 3.44 of Revenue Procedure 2026-35, the basic exclusion amount under Internal Revenue Code section 2010(c)(3) is $15,480,000 for calendar year 2027. That amount is used to determine the applicable credit against estate tax under section 2010(c)(1) and the applicable credit against gift tax under section 2505(a)(1). It is also used to determine the generation-skipping transfer exemption amount under section 2631(c).

IR-2026-133 states that the 2027 basic exclusion is up from $15,000,000 for estates of decedents who died in 2026. The same release states that the first $20,000 of gifts to any person for calendar year 2027 is not included in the total amount of taxable gifts, up from $19,000 for calendar year 2026.

Section 3.46 of the revenue procedure confirms those gift figures and adds that, for calendar year 2027, the first $201,000 of gifts to a spouse who is not a citizen of the United States is excluded from taxable gifts under sections 2503 and 2523(i)(2), instead of the general $20,000 annual exclusion. IR-2026-133 states that the noncitizen-spouse amount was $194,000 for calendar year 2026. The section 2801 tax on covered gifts and covered bequests from a covered expatriate applies only to the extent the value received during calendar year 2027 exceeds $20,000.

Special Use Valuation Cap and Related 2027 Amounts

Section 3.45 of Revenue Procedure 2026-35 addresses special use valuation for qualified real property. For an estate of a decedent dying in calendar year 2027, if the executor elects the method under section 2032A, the aggregate decrease in the value of qualified real property resulting from that election cannot exceed $1,500,000.

The same procedure indexes income-tax items that often appear with transfer-tax planning. For taxable years beginning in 2027, the standard deduction is $33,200 for married individuals filing jointly and surviving spouses, $24,925 for heads of household, and $16,600 for unmarried individuals and for married individuals filing separately. IR-2026-133 states that the joint standard deduction is up $1,000 from 2026 and that the maximum child tax credit for 2027 is $2,300, with a refundable amount of $1,800.

Legal Framework in Revenue Procedure 2026-35

Revenue Procedure 2026-35 is an annual inflation-adjustment publication under 26 CFR 601.602 and related Code sections. Section 3 lists the adjusted items by Code section, including the estate and gift provisions at sections 2010(c), 2032A, 2503(b), 2523(i), and 2801(c).

IR-2026-133 summarizes selected 2027 amounts of broad interest and points readers to the full revenue procedure for the complete set of nearly 70 adjusted provisions. The news release notes that personal exemptions remain at zero for tax year 2027 under the Working Families Tax Cuts framework.

Implications for Estates, Donors, and Personal Representatives

Estates of decedents who die during 2027 use the $15,480,000 basic exclusion when determining the federal estate tax credit. Donors making present-interest gifts in calendar year 2027 may exclude the first $20,000 to each donee under the annual gift exclusion, or the first $201,000 for gifts to a noncitizen spouse under the special rule. Generation-skipping transfer planning for 2027 uses the same basic exclusion figure for the exemption amount under section 2631(c).

Florida does not impose a state estate or inheritance tax for deaths after December 31, 2004, so federal exclusion and gift amounts remain the primary transfer-tax thresholds for Florida decedents and donors. Personal representatives, trustees, and donors who track federal filing thresholds should use the official 2027 figures in Revenue Procedure 2026-35 rather than prior-year tables when preparing 2027 gift returns or estate tax analyses for deaths in 2027.