The IRS has announced that the basic federal estate tax exclusion amount for the estates of decedents dying during calendar year 2017 will be $5.49 million, up from $5.45 million for calendar year 2016.
Also, if the executor chooses to use the special use valuation method for qualified real property, the aggregate decrease in the value of the property resulting from the choice cannot exceed $1,120,000, up from $1,110,000 for 2016.
The increase in the estate tax exclusion means that the lifetime tax exclusion for gifts will also rise to $5.49 million, as will the generation-skipping transfer tax exemption. The annual gift tax exclusion will remain at $14,000 for 2017.
For details on many of these and other inflation adjustments to tax benefits, go to: https://www.irs.gov/pub/irs-drop/rp-16-55.pdf
Remember that Washington State’s estate tax exclusion amount differs from the federal amount. An important factor to keep in mind when planning your estate.