2017 Estate Tax Exemption
The 2017 Estate Tax Exemption is $5,490,000.
Effective 2017-01-01Source: Rev. Proc. 2016-55 (IRS)Verified 2026-08-29
Compared with 2016
| Item | 2016 | 2017 | Change |
|---|---|---|---|
| Basic exclusion amount | $5,450,000 | $5,490,000 | +$40,000 (+0.7%) |
Who it applies to
Estates of decedents dying in calendar year 2017 that are subject to the federal estate tax under Internal Revenue Code Section 2010.
What changed this year, and why
For 2017, the basic exclusion amount for determining the unified credit against the federal estate tax is $5,490,000 for estates of decedents dying in calendar year 2017.
Common questions
- What was the estate tax exemption (basic exclusion amount) for 2017?
- The basic exclusion amount is $5,490,000.
Which estates have to file at all
For a person who died in 2017, the executor of the estate must file Form 706 if either of two conditions is met. First, the estate must file when the gross estate, plus adjusted taxable gifts and specific exemption, totals more than $5,490,000. Second, the estate must file even if the estate is below that amount when the executor chooses to transfer the deceased spouse's unused exclusion to the surviving spouse. To decide whether the $5,490,000 threshold is crossed, add the decedent's gross estate valued at date of death, the adjusted taxable gifts made after the date specified in section 2503, and any total specific exemption allowed for gifts made after the date specified in section 2521. The filing requirement applies to the estate of every U.S. citizen or resident. If neither condition applies, filing is not mandatory, though an executor may still file to make the portability election.
For decedents who died in 2017, Form 706 must be filed by the executor of the estate of every U.S. citizen or resident: a. Whose gross estate, plus adjusted taxable gifts and specific exemption, is more than $5,490,000; or, b. Whose executor elects to transfer the DSUE amount to the surviving spouse, regardless of the size of the decedent's gross estate.
Instructions for Form 706 (Rev. August 2017), United States Estate (and Generation-Skipping Transfer) Tax Return (IRS)
What counts toward the exemption
The gross estate is the starting point for determining whether an estate must file Form 706 and how much tax may be owed. It includes every interest the decedent held at the time of death, including real property located outside the United States. Beyond that basic rule, the gross estate also pulls in several categories of assets that might not otherwise be owned by the estate outright: certain lifetime transfers made without adequate consideration, annuities, the includible portion of joint estates with right of survivorship, the includible portion of tenancies by the entirety, certain life insurance proceeds even when payable directly to beneficiaries other than the estate, property over which the decedent held a general power of appointment, dower or curtesy (or statutory estate) of the surviving spouse, and community property to the extent of the decedent's interest. Because the filing threshold is $5,490,000, understanding what counts toward the gross estate is essential to deciding whether Form 706 must be filed at all.
Gross Estate The gross estate includes all property in which the decedent had an interest (including real property outside the United States). It also includes: Certain transfers made during the decedent's life without an adequate and full consideration in money or money's worth, Annuities, The includible portion of joint estates with right of survivorship (see instructions for Schedule E),
Instructions for Form 706 (Rev. August 2017), United States Estate (and Generation-Skipping Transfer) Tax Return (IRS)
The nine-month deadline and the extension
Form 706 must be filed within 9 months after the date of the decedent's death. That 9-month window is the default deadline for reporting estate tax and generation-skipping transfer tax. If the executor cannot meet that deadline, an automatic 6-month extension of time to file is available by submitting Form 4768, Application for Extension of Time To File a Return and/or Pay U.S. Estate (and Generation-Skipping Transfer) Taxes. The extension gives up to 6 additional months beyond the original 9-month due date, but it does not automatically extend the time to pay any tax owed, and the extension application itself must be filed by the original deadline. For estates making a portability election, meeting the timely filing deadline (original 9 months or the 6-month extension) is especially important, because the portability election is only valid if Form 706 is filed on time.
You must file Form 706 to report estate and/or GST tax within 9 months after the date of the decedent's death. If you are unable to file Form 706 by the due date, you may receive an extension of time to file. Use Form 4768, Application for Extension of Time To File a Return and/or Pay U.S. Estate (and Generation-Skipping Transfer) Taxes, to apply for an automatic 6-month extension of time to file.
Instructions for Form 706 (Rev. August 2017), United States Estate (and Generation-Skipping Transfer) Tax Return (IRS)
Carrying an unused exemption to a surviving spouse
A surviving spouse may be able to use the deceased spouse's unused exclusion (DSUE) amount to increase their own estate and gift tax exemption, but only if the executor of the first spouse's estate makes a portability election on a timely filed Form 706. The election can be made only if Form 706 is filed within 9 months of the decedent's date of death or, if an extension of time to file was granted, before the 6-month extension period ends. This means that even estates well below the $5,490,000 filing threshold must file a return if they want to preserve the option of transferring the unused exclusion to the surviving spouse. Executors who missed the original deadline may, in some cases, qualify for an extension under Rev. Proc. 2017-34, which allowed Form 706 to be filed on or before the later of January 2, 2018 or the second anniversary of the decedent's death, provided the return states it is filed pursuant to that revenue procedure.
An executor can only elect to transfer the DSUE amount to the surviving spouse if the Form 706 is filed timely; that is, within 9 months of the decedent's date of death or, if you have received an extension of time to file, before the 6-month extension period ends.
Instructions for Form 706 (Rev. August 2017), United States Estate (and Generation-Skipping Transfer) Tax Return (IRS)
How each figure was verified
Each number below was read from a stored copy of the document named beside it, and checked to occur word for word in the quoted sentence. The digest is of that stored text.
Rev. Proc. 2016-55 (IRS)
- Basic exclusion amount
For an estate of any decedent dying in calendar year 2017, the basic exclusion amount is $5,490,000 for determining the amount of the unified credit against estate tax under ยง 2010.