Updated 2022 Estate and Gift Tax Rates

Tucker Arensberg, P.C.

In Revenue Procedure 2021-45 (RP-2021-45 (irs.gov)), the Internal Revenue Service announced annual inflation-adjusted tax rates for 2022, including provisions concerning estate and gift taxes. 

Beginning in 2022, the annual gift exclusion will be $16,000 per doner, up from $15,000 in recent years. 

The unified credit against estate and gift tax in 2022 will be $12,060,000, up from $11.7 million dollars in 2021.  This, of course, could remain subject to change. 

As we discussed in more detail here, Congress previously proposed, as part of the Build Back Better Act, accelerating the sunset of the exemption to January 1, 2022 and essentially halving the exemption to an inflation adjusted $5,000,000, or approximately $6,030,000.  Importantly, that provision was removed and was not contained in the most recent versions of the legislative text of the Build Back Better Act passed by the House on November 19, 2021.  However, it could be reinserted as the bill proceeds to the U.S. Senate and works its way through the reconciliation process. 

Clients are strongly encouraged to continue to monitor this evolving situation on the estate and gift tax exemption and how it might impact their estate planning. 

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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