What is the estate tax exemption in 2026?
The federal estate and gift tax exemption is $15,000,000 per person for 2026 ($30,000,000 for a married couple using portability), set by the 2025 tax law and indexed for inflation after 2026. Above it the tax is 40%, and a large sale can push an estate over the line by turning stepped-up-at-death property into cash that grows.
By Hans Goldstein, Enrolled Agent, admitted to practice before the IRS · Updated
Short answer: $15,000,000 per person, $30,000,000 per couple, 40% above that. The 2025 law made the higher amount permanent (no 2026 sunset) and indexes it from 2027.
Key numbers
| 2026 figure | Amount | Source |
|---|---|---|
| Basic exclusion amount, per person | $15,000,000 | Rev. Proc. 2025-32; IRC 2010(c)(3) |
| Married couple with portability | $30,000,000 | Form 706 instructions (DSUE election) |
| Top estate and gift tax rate | 40% | IRC 2001(c) |
| Annual gift exclusion, per recipient | $19,000 | Rev. Proc. 2025-32; IRC 2503(b) |
| Generation-skipping transfer tax exemption | $15,000,000 | IRC 2631(c), equal to the basic exclusion amount |
| 2027 basic exclusion amount (engine, from CPI data) | $15,460,000 | IRC 2010(c)(3)(B) indexing |
Does a sale change my estate tax?
The sale itself does not create estate tax, but it changes what you will die owning. Property held until death gets a stepped-up basis (IRC 1014), so heirs can sell it with little or no income tax.
Once you sell, that option is gone: you pay the income tax, and what is left is cash that grows. At 6% money doubles in about 12 years, and the exemption is indexed only for inflation.
| Year | Estate (6% growth, 4.8% after tax) | Exemption per person | Federal estate tax, single | Federal estate tax, couple (portability) |
|---|---|---|---|---|
| 2026 | $13,000,000 | $15,000,000 | $0 | $0 |
| 2030 | $15,681,532 | $16,650,000 | $0 | $0 |
| 2035 | $19,824,165 | $18,840,000 | $393,666 | $0 |
| 2040 | $25,061,168 | $21,310,000 | $1,500,467 | $0 |
| 2045 | $31,681,645 | $24,110,000 | $3,028,658 | $0 |
A single seller with $13,000,000 today is under the line. In 2035 the same estate is about $19,824,165 against a $18,840,000 exemption: $393,666 of federal estate tax. By 2045: $3,028,658. A married couple who elects portability stays under the line in this example; a widow or widower does not.
Estate figures are from the Big Sale Tax estate engine: federal estate tax at 40% over the basic exclusion amount, $15,000,000 in 2026 and $15,460,000 in 2027, then indexed at an assumed 2.5% a year and rounded to $10,000 as IRC 2010(c)(3) requires. Assets grow 6% a year less a 20% tax drag (4.8% net). No state estate tax. Illustration only.
An installment note counts in the estate at its value, and the unreported gain in it is income in respect of a decedent (IRC 691): the heirs pay income tax on it as payments arrive, with a deduction for the estate tax on it. See step-up at death vs selling now.
States with their own estate tax
Twelve states and DC tax estates far below the federal line. Moving after a sale can change the answer; see state residency change before a sale.
| State | 2026 exemption | Rates |
|---|---|---|
| Connecticut | $15,000,000 (tracks federal) | 12% flat; tax capped at $15,000,000 |
| District of Columbia | $4,988,400 | 11.2% to 16% |
| Hawaii | $5,490,000 | 10% to 20% |
| Illinois | $4,000,000 | Up to 16% |
| Maine | $7,160,000 | 8% to 12% |
| Maryland | $5,000,000 | Up to 16% (Maryland also has an inheritance tax) |
| Massachusetts | $2,000,000 | Up to 16% |
| Minnesota | $3,000,000 | 13% to 16% |
| New York | $7,350,000 | Up to 16%; over 105% of the exemption the whole estate is taxed |
| Oregon | $1,000,000 | 10% to 16% |
| Rhode Island | $1,838,056 | 0.8% to 16% |
| Vermont | $5,000,000 | 16% flat |
| Washington | $3,000,000 (deaths from July 1, 2026) | 10% to 20% (Table W, after the 2026 rollback) |
State figures: Big Sale Tax estate engine table (state revenue department pages checked October 29, 2026); DC and Rhode Island amounts from their 2026 indexed announcements. States change these often.
Run your own
Estate tax strategy calculator (hold, 1031, installment sale, ILIT) and buy, borrow, die vs 1031 + installment sale + ILIT.
Related guides: structured installment sale, ILIT after selling property, selling a business before retirement.
Frequently asked questions
Is the $15,000,000 exemption permanent now?
It no longer sunsets. The 2025 law set it at $15,000,000 for 2026 and indexes it for inflation from 2027. Any future Congress can still change it.
Does portability need a return?
Yes. The surviving spouse gets the unused exemption (DSUE) only if the executor files a timely Form 706 and elects portability, even when no tax is due. Rev. Proc. 2022-32 allows a late election within five years for estates not otherwise required to file.
Do gifts in 2026 use the exemption?
Gifts up to $19,000 per recipient per year do not. Larger gifts are reported on Form 709 and use part of the $15,000,000; tax is due only after the whole exemption is used.
How does an installment note count in my estate?
At its fair market value at death. The deferred gain inside it is income in respect of a decedent (IRC 691), so the heirs pay income tax as the payments arrive and get no step-up on it.
What is the estate tax rate above the exemption?
40% on the amount over the exemption (IRC 2001(c)), plus any state estate tax.
Sources
- IRS, What's new: estate and gift tax
- IRS Rev. Proc. 2025-32, 2026 inflation adjustments
- IRC 2010, unified credit and basic exclusion amount (Cornell LII)
- IRC 2001, estate tax rate schedule (Cornell LII)
- IRC 2503(b), annual gift exclusion (Cornell LII)
- IRC 2631, generation-skipping transfer tax exemption (Cornell LII)
- IRS Instructions for Form 706, including the portability election
- IRS Instructions for Form 709, gift tax return
- IRC 1014, basis of property acquired from a decedent (Cornell LII)
- IRC 691, income in respect of a decedent (Cornell LII)
Links checked October 30, 2026.
Hans Goldstein is an Enrolled Agent, admitted to practice before the Internal Revenue Service. Not affiliated with or endorsed by the IRS. General education, not tax or legal advice for your situation.
Insurance products offered through Goldstein & Co. LLC dba Goldstein Insurance Services, CA license 4273294. If you implement a structured installment sale through that business, Hans is paid a commission by the insurer; it is built into the payout rate. See the disclosures.
Also free: the book Same Sale, Different Tax, the same $1,000,000 gain taxed ten ways. Want it run on your sale? Book a free scope call to see whether the Big Sale Tax Analysis is worth it.
Who you will talk to
Hans Goldstein · Sacramento, California
Hans Goldstein: Tax & Exit Planning, an independent practice. Enrolled Agent, admitted to practice before the Internal Revenue Service. CA Insurance License #4273294, NPN 20602398.
- What happens first
- You fill in the short form for a free scope call, about 5 minutes. Hans reviews every one personally and replies within 1 business day. If it is a fit, you get a link to book the call.
- The scope call
- Fifteen minutes, free: price, timeline, what you are selling and what the money is for. Scope means you hear whether the analysis is worth it for your sale.
- What you get
- A written side-by-side comparison of your cash-sale baseline against every path that fits, year-by-year numbers, a written recommendation, and a review meeting with you and, if you like, your CPA and attorney.
- What it costs
- The scope call is free. The Big Sale Tax Analysis is $5,000 per household per transaction, only if you decide it is worth it. No retainer, no hourly billing, no obligation to use any strategy.
- How Hans is paid
- The $5,000 fee pays for analysis only and is not reduced or credited if you buy anything. You are never required to buy anything. No referral fees are paid to or received from brokers, CPAs or attorneys. Hans is also a licensed insurance producer with a separately owned insurance business. That business is not part of this engagement, and the analysis does not recommend insurance products. If you later choose an installment sale funded through an insurance company, that company pays Hans a commission through his separate insurance business. He may be compensated by that business if you use an insurance-funded installment sale. Hans is an Enrolled Agent (EA), admitted to practice before the Internal Revenue Service. He is not a CPA, attorney or registered investment adviser; the analysis models tax effects and does not recommend specific securities. Read the disclosures.
Book a free scope call or call 213-340-2018. Hans answers or calls back the same business day.
Is your sale pushing you over the line?
Send the expected price and a rough net worth. On a free scope call we check the income tax and the estate tax side together.
Prefer email? Request the analysis by email.
You talk to Hans Goldstein. Enrolled Agent, admitted to practice before the IRS.