IRS Releases 2024 Lifetime Exemption and Annual Gift Exclusion Amounts

On November 9, 2023, the IRS issued Revenue Procedure 2023-34, providing the annual inflation adjustments for tax provisions to be used by individual taxpayers on their 2024 returns. The adjustments include the following:

For 2024, the estate, gift, and generation-skipping transfer tax exemption amount is $13,610,000, an increase from $12,920,000 for transfers in 2023.

The annual exclusion for gifts is $18,000 for calendar year 2024, an increase from $17,000 for 2023.

For 2024, the first $185,000 of gifts to a spouse who is not a citizen of the United States (other than gifts of future interests in property) are not included in the total amount of taxable gifts made during that year, an increase from $175,000 for 2023.

These changes reflect the continued high rate of inflation. The increase in basic exclusion amount means that an individual will be able to transfer $690,000 ($1,380,000 for married couples) more free of transfer tax liability in 2024 than they could in 2023.

The $18,000 annual exclusion amount for gifts represents the third increase in three years: the exclusion amount for gifts was increased to $17,000 in 2023 from $16,000 in 2022 after remaining at $15,000 from 2018 through 2021.