Tax Reference

Estate & Gifts

Estate tax planning, gifting strategies, trusts, step-up in basis, and HNW wealth transfer.
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The estate and gift tax exemption is $15 million per person under OBBBA - permanent and inflation-adjusted. Federal estate tax affects very few estates at this threshold, but income tax planning at death (the step-up in basis), trust structures, and beneficiary designations remain critical for virtually everyone with meaningful assets.

Estate Planning
Guide
Estate Planning Basics
$15M exemption, §1014 step-up, wills vs. trusts, beneficiary designations, portability.
Guide
Gift & Estate Tax Guide
$15M unified exemption, annual exclusion $19K, GST tax.
Guide
Trust Tax Guide
Revocable vs. irrevocable, SLAT, GRAT, IDGT, grantor rules.
Guide
OBBBA $15M Permanent Estate Exemption
OBBBA permanently raised unified estate/gift/GST exemption to $15M per individual ($30M MFJ via portability) effective 1/1/2026. No TCJA sunset. Inflation-indexed 2027+. 40% top rate unchanged. §1014 step-up preserved. Annual exclusion $19,000 (2026). No clawback. State estate tax planning still essential.
Guide
Portability and DSUE Deep Dive
§2010(c) DSUE mechanics. Rev. Proc. 2022-32 5-year late portability election. Last Deceased Spouse rule. Form 706 filing requirement even for non-taxable estates. GST exemption NOT portable. Multiple marriages strategy. Open SOL on DSUE redetermination under §2010(c)(5)(B). $30M combined exemption under OBBBA.
Guide
§1014 Step-Up Basis at Death
Section 1014 complete mechanics. FMV step-up at decedent's date of death (or alternate valuation date §2032). OBBBA made $15M basic exclusion PERMANENT. IRD exception §1014(c) - NO step-up for IRAs, 401(k)s, annuities, deferred comp, Series EE bond interest, installment notes. Community property DOUBLE step-up §1014(b)(6) at first spouse's death. Boomerang rule §1014(e) - 1-year pre-death gift to donor. Consistent basis reporting Form 8971 (T.D. 9991 / 10054). §2032 alternate valuation - all-or-nothing election. §2032A special use 2026 maximum $1,460,000. Rev. Rul. 2023-2 irrevocable grantor trust NOT in estate = NO step-up.
Guide
§645 Election: QRT as Estate
Section 645 complete mechanics. Election permits Qualified Revocable Trust (QRT) and decedent's estate to file combined Form 1041 for "election period." QRT = trust treated as owned by decedent under §676 at death. Form 8855 jointly signed by executor and trustee, attached to first combined Form 1041 by due date with extensions. IRREVOCABLE once made. Benefits: FISCAL YEAR election (any month-end up to 12 months post-death; tax deferral), §642(c) charitable deduction expansion (paid OR permanently set aside), §6654(l) 2-year estimated tax exemption, §469(i) $25,000 passive loss allowance, extended S-corp eligibility, income consolidation. Election period: 2 years post-death (no Form 706) OR LATER of 2 years/6 months after final 706 determination. End-of-period §645(g) deemed distribution to QRT; basis and carryover items preserved. T.D. 9982 (June 2024) anti-abuse rules.
Guide
§6166 Estate Tax Installment for Closely Held Business
Section 6166 complete mechanics. Lets an executor defer estate tax attributable to a closely held business over up to 14 years, preventing forced sale of family businesses. Qualification §6166(a)(1): value of closely held business interest must EXCEED 35% of adjusted gross estate (gross estate minus §2053 and §2054 deductions). Closely held business §6166(b)(1): sole proprietorship; partnership (20%+ capital in estate OR 45 or fewer partners); corporation (20%+ voting stock in estate OR 45 or fewer shareholders). Payment structure: up to 5 years interest-only, then up to 10 annual principal-plus-interest installments. 2% interest rate on the estate tax attributable to the first ~$1,890,000 (2026 indexed) of business value above the exclusion amount; 45% of the §6601 underpayment rate on the excess. Interest NOT deductible §2053(c)(1)(D). Acceleration §6166(g): disposition or withdrawal of 50%+ of business, missed installment, or undistributed income makes all remaining tax due. §6324A special estate tax lien in lieu of bond. §303 stock redemption coordination. Passive assets §6166(b)(9) excluded. Aggregation §6166(c) of multiple businesses (20%+ each). Form 706 election.
HNW Planning
Guide
HNW Planning Guide
Pre-exit planning, concentrated positions, charitable strategies.
Guide
NRA Estate Tax
$60K exemption for nonresident aliens, QDOT trusts.
Additional Resources
Guide
Donor-Advised Fund (DAF)
Immediate deduction; tax-free growth; bunching charitable gifts.
Guide
§1035 Exchange
Tax-free swap of life insurance and annuity contracts.
Gifts, Transfers & Inheritance
Guide
Form 709 Gift Tax Return
$19,000 annual exclusion, $15M lifetime, gift splitting, direct tuition/medical exclusion.
Guide
Marital Deduction
Unlimited §2056/§2523, QTIP, QDOT non-citizen spouse, $190K gift exclusion.
Guide
Inherited Money & Property
§102 exclusion, §1014 step-up, inherited IRA 10-year rule, estate tax $15M threshold.
Guide
529 Superfunding
Front-load $190K/couple, 5-year gift averaging, estate planning use case.
Guide
Grantor Trust Rules §671-678
IDGT estate freeze, sale to grantor trust, Rev. Rul. 2023-2 no step-up.
Guide
Generation-Skipping Transfer Tax
$15M GST exemption permanent, 40% rate, dynasty trusts, no portability.
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