Estate and gift tax exemption amounts

(Section 2010)

What Section 2010 Covers

Section 2010 of the Internal Revenue Code is the provision that sets the “unified credit” (or exemption) against estate tax, gift tax, and generation-skipping transfer (GST) tax.

It says:

• Every individual has a certain amount they can transfer (by lifetime gifts or at death) without paying the federal transfer tax.

• Anything above that exemption is taxed at rates up to 40%.

The New Law (Effective 2026)

1. Estate and Gift Tax Exemption

   • Currently (2025): $13.99 million per person.

   • Starting Jan. 1, 2026: $15 million per person.

   • Married couples can combine their exemptions → $30 million total.

   ✅ Example:If a single person dies in 2026 with $14.5M in assets → no estate tax owed, because it’s under the $15M exemption.If they have $16.5M → $1.5M would be subject to federal estate tax.

   
   

2. Generation-Skipping Transfer (GST) Tax Exemption

   • Same numbers apply: $15M per person in 2026.

   • This applies when transfers “skip” a generation (e.g., grandparent → grandchild).

     
     

3. Annual Inflation Adjustment

   • The $15M figure will be indexed to inflation going forward.

   • So in 2027, 2028, etc., the exemption could be slightly higher than $15M.

Tombstones at a cemetery