The federal estate- and gift-tax exemption applies to the total of an individual’s taxable gifts made during life and assets left at death. Above the exemption, the top rate on such transfers is 40%.
In 2017, Congress doubled the exemption starting in 2018, and the amount will continue to rise with inflation through 2025. This expansion helped reduce the number of taxable estates to about 1,300 for returns filed in 2020 from about 5,200 in 2017, according to the latest IRS data.
