By Harry Prabandham · Updated September 27, 2026
Estate & Legacy
Federal Estate and Gift Tax Exemption in 2026
For 2026, the federal estate and gift tax exemption is $15 million per person ($30 million per married couple), indexed for inflation from 2027.
Federal Estate and Gift Tax Exemption in 2026
1 / 6
What is the lifetime exemption?
- One combined federal allowance covers taxable gifts during life and transfers at death; using it on gifts reduces what's left for your estate.
- For 2026 it is $15 million per person, set by the One Big Beautiful Bill Act and adjusted for inflation starting in 2027.
- Transfers above the exemption are generally taxed at a top federal rate of 40%.
- Gifts to a U.S.-citizen spouse and to charity are generally unlimited and do not use the exemption.
Try Our Free Tools
Full Guide
What is the lifetime exemption?
- One combined federal allowance covers taxable gifts during life and transfers at death; using it on gifts reduces what's left for your estate.
- For 2026 it is $15 million per person, set by the One Big Beautiful Bill Act and adjusted for inflation starting in 2027.
- Transfers above the exemption are generally taxed at a top federal rate of 40%.
- Gifts to a U.S.-citizen spouse and to charity are generally unlimited and do not use the exemption.
How do annual exclusion gifts fit in?
- In 2026, you can give up to $19,000 per recipient without using exemption or filing a gift tax return.
- Married couples can split gifts to give $38,000 per recipient, though gift-splitting requires filing Form 709.
- Tuition and medical bills paid directly to the school or provider are excluded without limit.
- Larger gifts require Form 709 and reduce remaining exemption, but usually no tax is due until the exemption is used up.
How does portability work for married couples?
- A surviving spouse can use the deceased spouse's unused exemption, but only if the executor elects it on a Form 706.
- Form 706 is due nine months after death, with a six-month extension available.
- Estates not otherwise required to file can usually make a late portability election within five years under Rev. Proc. 2022-32.
- The generation-skipping transfer tax exemption, also $15 million in 2026, is not portable between spouses.
What happened to the 2026 sunset?
- Before July 2025, the exemption was scheduled to drop by roughly half after 2025 when the 2017 tax law's increase expired.
- The One Big Beautiful Bill Act replaced that sunset with a $15 million base amount with no scheduled expiration.
- Congress can still change the amount in future legislation, so plans benefit from periodic review.
- Treasury regulations generally prevent retroactive estate tax on gifts made under a higher exemption if the amount later falls.
Trade-offs of lifetime gifts
- Gifted assets keep your original cost basis, while assets held until death generally receive a step-up in basis.
- Gifting fast-appreciating assets, such as early-stage company stock, moves future growth out of your estate.
- Gifts are generally irrevocable, so your own future spending and liquidity needs come first.
- California has no state estate or gift tax, but several states impose estate taxes with much lower exemptions.
Key takeaways
- 2026 exemption: $15 million per person and $30 million per couple, with a 40% top rate above it.
- Annual exclusion gifts of $19,000 per recipient in 2026 do not use exemption.
- Portability requires a Form 706 filing; skipping it can forfeit a spouse's unused exemption.
- Estate planning involves legal documents and tax filings; work with an estate attorney and CPA, as Rubric does not give legal advice.
Related Topics
Tax Planning
Annual Gift Tax Exclusion in 2026: Gift Splitting, 529s, and Trusts
In 2026 you can give $19,000 per recipient without using exemption or filing a gift tax return. The lifetime exemption is $15 million.
Estate & LegacyStep-Up in Basis: How Inherited Assets Are Taxed
Inherited assets generally get a new cost basis equal to value at death, so gain that built up during the owner's life isn't taxed when heirs sell.
Estate & LegacyGeneration-Skipping Trusts and the GST Tax in 2026
The GST tax is a separate 40% tax on transfers to grandchildren and later generations. The 2026 exemption is $15 million per person and must be allocated.