President Trump’s second tax act, The One Big Beautiful Bill Act (“BBB Tax Act”) was signed into law on July 4, 2025. This was important from a tax perspective. In general, the BBB Tax Act continued on a permanent basis a significant number of the tax changes that had previously been made under President Trump’s first tax act enacted in 2017, known as the Tax Cuts and Jobs Act (“TCJA”). The BBB Tax Act also improved many of these previous TCJA changes.
The purpose of this Newsletter is not to fully review the BBB Tax Act, but to set out the important estate planning related tax exemption figures for 2026, as updated for inflation and the BBB Tax Act.
The Basic Exclusion Amount (“BEA”) (also known as the Unified Gift and Estate Tax Exclusion Amount) for 2026 has been increased to $15 million per person and is indexed (scheduled to increase) for inflation beginning in 2027.
The Generation Skipping Transfer (“GST”) tax exemption uses the same figures as the BEA amount, although this has not always been the case. As a result, the GST tax exemption amount for 2026 has also increased to $15 million per person and is indexed (scheduled to increase) for inflation beginning in 2027.
The Gift tax annual exclusion permits you to make tax free gifts without having any effect on your available BEA (and possibly, no effect on your available GST tax exemption amount). The gift tax annual exclusion is $10,000, indexed for inflation and moves up only in increments of $1,000. For 2026, the Gift tax annual exclusion amount stays the same as 2025, which is $19,000 per donee.
The Gift tax annual exclusion for gifts to a non-USA citizen spouse is different than the normal Gift tax annual exclusion since gifts to a non-USA citizen spouse do not normally qualify for the unlimited marital deduction from the Gift, Estate, and GST taxes. As a result, the annual Gift tax annual exclusion is important in moving assets between spouses, when at least one of them is a non-USA citizen. The Gift tax annual exclusion for gifts to a non-USA citizen spouse is $100,000, indexed for inflation. For 2026, this exemption amount increases from $190,000 to $194,000.
For more information on the updated tax figures, please see Rev. Proc. 2025-32 at https://www.irs.gov/pub/irs-drop/rp-25-32.pdf.
If you would like to discuss estate and tax planning in your particular situation, please call us at (678) 720-0750, ext. 1 or e-mail us at info@morgandisalvo.com to schedule a consultation. We can discuss your situation, answer your questions, and determine what planning might be the best fit for you. We look forward to meeting with you.
