U.S. Treasury Issues Rev. Proc. 2023-34 Detailing Changes to Estate, Gift & Generation Skipping Transfer Tax Rates & SECURE Act 2.0 Revisions for 2024 & Beyond

On November 11, 2023, the U.S. Treasury Department issued Rev. Proc. 2023-34 releasing the 2024 inflation-adjusted exemptions for estate, gift, and generation-skipping transfer tax as follows:

• The estate and gift exemption amount (currently $12.92 million in 2023) will increase to $13.61 million per taxpayer for 2024 ($27.22 million per married couple).  The generation-skipping transfer tax will likewise increase by the same amount.
• The annual gift tax exclusion will increase from the current $17,000 per donee per year to $18,000 in 2024.
• The annual gift tax exclusion amount that can be given annually to a non-citizen spouse is increasing from $175,000 up to $185,000 in 2024.

Rev. Proc. 2023-34 also provides that trusts and estates will be thrust into the highest marginal fiduciary income tax bracket for ordinary income once a trust’s or estate’s accumulated, undistributed income reaches $15,200 in 2024.  Therefore, a trustee or estate’s administrator should seek competent fiduciary income tax advice to determine how to mitigate payment of income tax at the extraordinary federal marginal rate of 37%.  The income tax rates for estates and trusts breaks down as follows:

For more information on how these tax law changes may impact your estate or financial planning, contact the attorneys at North Carolina Estate Planning and Fiduciary Law.  Our firm is led by North Carolina Board Certified Estate Planning & Probate Law Specialist and Certified Financial Planner, attorney James E. Hickmon, who has decades of experience assisting individuals and families navigate the complexities of estate and trust planning, estate administration, financial planning, and estate controversies.