Several recently announced 2025 inflation adjustment numbers may affect affluent taxpayers. One is the federal gift and estate tax exemption. For 2025, the exemption will be $13.99 million, up from $13.61 million for 2024. What happens with the exemption after 2025 is uncertain. Without further legislation, it’s scheduled to return to an inflation-adjusted $5 million in 2026. Taxpayers with estates in roughly the $6.5 million to $13 million range would generally escape estate tax if they were to die while the higher exemption is in effect. But they won’t if they were to die after 2025. If this is your situation, keep estate tax liability in mind in estate planning.
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