Bloomberg Tax projects that the basic exclusion amount for decedents dying in 2023 and the generation-skipping transfer tax exemption amount for 2023 will be $12,920,000 (up from $12,060,000 in 2022). The annual exclusion amount for gifts made in 2023 is projected to be $17,000 (up from $16,000 in 2022). Gifts to noncitizen spouses not included in the total amount of taxable gifts made during 2023 is estimated to be $175,000 (up from $164,000 in 2022).
Bottom line: The projected increase in basic exclusion amount means that an individual will be able to transfer an additional $860,000 ($1,720,000 for married couples) free of transfer tax liability in 2023. The $17,000 annual exclusion amount for gifts represents the second increase in two years: the exclusion amount for gifts was increased to $16,000 in 2022 after remaining at $15,000 from 2018 through 2021. Clients should consider taking advantage of the planning opportunities provided by these increases, especially in light of the sunset of the doubled exemption amount at the end of 2025.