2018 Estate Tax Exemption
The 2018 Estate Tax Exemption is $11,180,000.
Effective 2018-01-01Source: Rev. Proc. 2018-18 (Internal Revenue Bulletin 2018-10) (IRS)Verified 2026-09-01
Compared with 2017
| Item | 2017 | 2018 | Change |
|---|---|---|---|
| Basic exclusion amount | $5,490,000 | $11,180,000 | +$5,690,000 (+103.6%) |
Who it applies to
Estates of decedents who died during calendar year 2018
What changed this year, and why
For calendar year 2018, the basic exclusion amount for the federal estate tax is $11,180,000 per decedent. This amount is used to calculate the unified credit against estate tax under Internal Revenue Code Section 2010. The increase resulted from the Tax Cuts and Jobs Act of 2017, which temporarily raised the estate tax exemption for estates of decedents dying after a specified date in late 2017.
Common questions
- What is the estate tax exemption?
- The estate tax exemption is the amount a person can pass on at death without owing federal estate tax. For 2018, the basic exclusion amount was $11,180,000 per person, reflecting a temporary increase enacted by the Tax Cuts and Jobs Act of 2017.
- Did the 2018 exemption apply to all estates regardless of when the person died?
- No. The $11,180,000 basic exclusion amount applied only to estates of decedents who died during the 2018 calendar year.
Which estates have to file at all
For a person who died in 2018 and was a U.S. citizen or resident, the executor of the estate must file Form 706 if either of two conditions is met. First, filing is required when the decedent's gross estate, plus any adjusted taxable gifts and specific exemption, exceeds $11,180,000. The gross estate includes all property in which the decedent had an interest, along with certain lifetime transfers, annuities, the includible portion of joint estates and tenancies by the entirety, and certain life insurance proceeds. Second, filing is required even if the estate is far smaller than the threshold whenever the executor chooses to elect portability — that is, to transfer the deceased spousal unused exclusion (DSUE) amount to the surviving spouse. In that case the return must be filed regardless of the size of the decedent's gross estate, because the election can only be made on a timely filed Form 706. Estates that do not meet either of these two conditions generally do not have to file.
For decedents who died in 2018, 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 $11,180,000; 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. November 2018), United States Estate (and Generation-Skipping Transfer) Tax Return (IRS)
What counts toward the exemption
The gross estate is the starting point for deciding whether the $11,180,000 filing threshold is crossed. The gross estate includes all property in which the decedent had an interest, including real property outside the United States. It also pulls in several items that might not otherwise seem to belong to the estate: 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, specified life insurance proceeds even when payable to beneficiaries other than the estate, property over which the decedent possessed a general power of appointment, the dower or curtesy interest of the surviving spouse, and community property to the extent of the decedent's interest under applicable law. When the value of all these items, plus adjusted taxable gifts and any specific exemption, exceeds $11,180,000, the executor must file Form 706. Property that does not meet these inclusion tests remains outside the 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 the instructions for Schedule E), • The includible portion of tenancies by the entirety (see the instructions for Schedule E), • Certain life insurance proceeds (even though payable to beneficiaries other than the estate) (see the instructions for Schedule D), • Property over which the decedent possessed 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 as defined by applicable law.
Instructions for Form 706 (Rev. November 2018), 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. This deadline applies to returns reporting estate tax, generation-skipping transfer tax, or both. If the executor cannot meet the 9-month due date, 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. Together the initial period and the extension give the estate additional time beyond the original deadline to submit the return. The extension is not automatic for payment of any tax due, which generally must still be paid by the original 9-month deadline to avoid interest. For estates filing solely to make the portability election, the return must still arrive within the 9-month window or the granted extension period, or the DSUE amount cannot pass to the surviving spouse unless special relief provisions apply.
When To File 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. November 2018), United States Estate (and Generation-Skipping Transfer) Tax Return (IRS)
Carrying an unused exemption to a surviving spouse
The portability election allows the executor of a decedent's estate to transfer the deceased spousal unused exclusion, known as the DSUE amount, to the surviving spouse so it can be used for future gift or estate tax purposes. The election is available only when Form 706 is filed on time, which means within 9 months of the decedent's date of death or, if an extension was granted, before the 6-month extension period ends. Executors who were not required to file under section 6018(a) but failed to file timely may be eligible for relief under Rev. Proc. 2017-34 or, in some cases, under applicable regulations. When an estate uses one of these late-election procedures, the return must include a specific notation at the top identifying it as filed pursuant to that revenue procedure. Once properly made, the portability election lets the surviving spouse add the decedent's unused portion of the basic exclusion amount to his or her own exclusion for later transfers.
Portability election. 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. November 2018), 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. 2018-18 (Internal Revenue Bulletin 2018-10) (IRS)
- Basic exclusion amount
For an estate of any decedent dying in calendar year 2018, the basic exclusion amount is $11,180,000 for determining the amount of the unified credit against estate tax under § 2010.