In Revenue Procedure 2019-44, the IRS has released the official inflation adjustments for 2020, and the adjustments relevant to estates, trusts and gifts are all as expected.
For an estate of any decedent dying in calendar year 2020, the basic exclusion amount will be $11.58 million for determining the amount of the unified credit against estate tax under IRC Section 2010. The exemption for generation-skipping transfer tax, which is determined by reference to the unified credit, will also be $11.58 million.
The annual exclusion will remain the same as in 2019: The first $15,000 of qualifying gifts to any person is excluded from the calculation of taxable gifts under IRC Section 2503 made during that year.
For calendar year 2020, the first $157,000 (up from $155,000) of qualifying gifts to a spouse who isn’t a U.S. citizen (other than gifts of future interests in property) will be excluded from the total amount of taxable gifts under Sections 2503 and 2523(i)(2) made during that year. The special use valuation limitation will be $1.18 million (up from $1.16 million). The IRC Section 6166 2% portion will be $1.57 million (up from $1.55 million).