The Lifetime Gift and Estate Tax Exemption in 2026

The 2026 number: $15,000,000 per person

For deaths and gifts in 2026, the basic exclusion amount is $15,000,000 per person (IRC § 2010(c)(3)). That figure was set by the 2025 legislation — Public Law 119-21 — which raised the base to $15 million for 2026 and indexes it for inflation thereafter, and it is confirmed on the IRS’s “What’s New — Estate and Gift Tax” page. Only cumulative taxable gifts and bequests above the exemption are taxed, at rates topping out at 40% (IRC § 2001(c)). The great majority of estates owe no federal estate tax at all.

One exemption for gifts and estates

The gift tax and the estate tax are unified: they share a single lifetime exemption, and using it during life leaves less at death. When you make a gift above the annual exclusion, the excess reduces the exemption available to your estate. So the $15 million is not a gift allowance plus a separate estate allowance — it is one cumulative pool measured across your lifetime gifts and your estate together (§ 2010; § 2001). This is why large lifetime gifts are an estate-tax decision: they spend the same exemption your estate would otherwise use.

Portability and the deceased-spousal unused exclusion

When the first spouse dies without using their entire exemption, the unused portion — the “deceased spousal unused exclusion,” or DSUE — can pass to the surviving spouse and be added to their own exemption (IRC § 2010(c)(2), (4)). That is what lets a couple reach $30 million. The essential catch: portability is not automatic. The estate of the first spouse to die must elect it by filing a federal estate-tax return (Form 706) — even when no tax is due and no return would otherwise be required (§ 2010(c)(5)(A)). Missing that election can forfeit millions in exemption. Note too that the DSUE covers the estate and gift tax but not the generation-skipping transfer tax, which has its own, non-portable exemption discussed below.

The “clawback” worry, now settled

For years planners worried about “clawback”: if someone made large gifts while the exemption was high and then died after it had dropped, would the estate be taxed as if the extra exemption had never existed? Two things resolved it. First, Treasury issued an anti-clawback regulation confirming that gifts sheltered by the exemption in the year they were made are not later clawed back if the exemption falls (Treas. Reg. § 20.2010-1(c)). Second, the 2025 law removed the scheduled post-2025 decrease altogether and set the base at $15 million going forward (Public Law 119-21). The practical upshot: the exemption did not fall in 2026, and gifts made under a higher exemption are protected in any case.

The separate generation-skipping transfer exemption

Transfers that skip a generation — typically to grandchildren or into trusts for them — face a second layer, the generation-skipping transfer (GST) tax, with its own exemption. For 2026 the GST exemption equals the basic exclusion: $15,000,000 per person (IRC § 2631; Rev. Proc. 2025-32). Unlike the estate-and-gift exemption, the GST exemption is not portable between spouses and must be affirmatively allocated, which makes multi-generational planning its own discipline. We cover trusts built for it — and the ILIT, a common GST vehicle — in the ILIT cluster and, as it ships, the broader planning library.

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