Estate planning attorneys and others in the wealth management community have known since mid-December that the amount clients can pass without taxation is now, temporarily, doubled. The new tax law doubled the exclusion until the end of 2025. On January 1, 2026, the exclusion reverts to $5 million (adjusted for inflation from 2011). Each year we get inflation adjustment figures from the Department of the Treasury in the form of a Revenue Procedure.
The exclusion amount for 2018 was set to be $5.6 million, pursuant to Revenue Procedure 2017-58, released in October 2017. So, originally, it appeared the $5.6 million exclusion doubled to $11.2 million. However, while part of the new tax law doubled the exclusion, another part changed how inflation is calculated. It’s now based on “chained-CPI.” As a result of the new adjustment method, we learned from Revenue Procedure 2018-18, released in March 2018, the exclusion for 2018 is doubled to $11.18 million, rather than $11.2 million.
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