The IRS has announced an increase in the federal estate and gift tax exemption for 2027, raising the "basic exclusion amount" to $15.48 million per individual, up from $15 million in 2026. This exemption allows for tax-free transfers of assets during a person’s lifetime and at death, although state-level exemptions may be lower and still apply. The federal adjustment reflects inflation and follows legislative changes under President Donald Trump’s “big beautiful bill,” which initially set the exemption at $15 million per person.

This increase continues to affect the small number of families subject to federal estate taxes. Current estimates from the Tax Policy Center indicate that in 2026, about 6,890 federal estate tax returns will be filed, with approximately 3,900 being taxable. Without the recent legislation, exemptions would have reverted to 2017 levels, roughly $5 million plus inflation adjustments, prompting ultra-wealthy families to engage in estate planning ahead of the change.

Along with the estate and gift tax exemption, the IRS has made inflation adjustments to several other tax-related provisions for 2027. These adjustments include federal income tax brackets, capital gains tax brackets, and eligibility thresholds for the earned income tax credit. These changes come at a time when many Americans face financial pressures due to rising housing costs, grocery prices, and gas expenses.

The increased exemption reflects ongoing legislative and economic trends impacting tax policy in the United States. It underscores the government's approach to adjusting tax parameters annually for inflation while maintaining high exemption levels established in recent years. This change will be significant for estate planning and gift transfers among wealthy individuals as the 2027 tax year approaches.