Estate Tax $15M Exemption Calculator 2026
Calculate federal estate tax under the OBBB $15 million per-person exemption (P.L. 119-21, signed July 4, 2025). OBBB prevented the scheduled sunset to ~$7M. Enter your gross estate, deductions, and prior gifts to see your taxable estate and 40% rate tax.
Federal Estate Tax in 2026 — OBBB Raised the Exemption to $15 Million
The federal estate tax imposes a 40% rate on the taxable portion of an estate — the gross estate minus deductions and the applicable exemption. The One Big Beautiful Bill (OBBB, P.L. 119-21, signed July 4, 2025) raised the per-person estate tax exemption to $15,000,000 for 2026. Without OBBB, the TCJA's elevated exemption (~$13.99M in 2025) would have sunsetted after December 31, 2025, reverting to approximately $7 million per person — creating a massive cliff that would have brought millions of additional estates into the taxable range.
With OBBB, the $15M exemption is permanent and indexed for inflation. Married couples can effectively shelter $30M via portability — the surviving spouse claims the deceased spouse's unused exemption (DSUE) by filing Form 706 to elect portability. The estate must file Form 706 within 9 months of death (6-month extension available) even if no tax is owed, to preserve the portability election. Source: IRS Publication 559, irs.gov/form706. Last updated: May 2026.
Calculating the Taxable Estate — Key Deductions
| Item | Included in Gross Estate? | Deductible? |
|---|---|---|
| Real estate (FMV at death) | Yes | No (deduct mortgages separately) |
| Investment accounts | Yes | No |
| IRAs / 401(k)s | Yes — but pre-tax amounts subject to income tax when heirs withdraw | No |
| Life insurance (owned by decedent) | Yes | No (use ILIT to exclude) |
| Assets to US citizen spouse | Yes (gross) | Yes — unlimited marital deduction |
| Assets to qualifying charities | Yes (gross) | Yes — unlimited charitable deduction |
| Debts, mortgages, loans | No | Yes — reduces gross estate |
| Funeral and admin expenses | No | Yes |
The adjusted gross estate = gross estate − debts − admin/funeral expenses. The taxable estate = adjusted gross estate − marital deduction − charitable deduction. Prior taxable gifts (from Form 709) are added back to the taxable estate when computing the tax base, but a credit is given for any gift tax previously paid. The effective tax is: (taxable estate + adjusted taxable gifts) × progressive rates − applicable exemption credit. Source: IRS Form 706 instructions, IRC §2001.
Estate Tax Planning Strategies Under the $15M Exemption
Even with the $15M per-person exemption, high-net-worth families benefit from planning: (1) Portability election — always file Form 706 to lock in the surviving spouse's DSUE, even if no tax is owed; (2) Annual gifting — $19,000 per recipient in 2026, not counting against the lifetime exemption; (3) Irrevocable trusts — GRATs, SLATs, and CLTs remove appreciation from future estates; (4) 529 superfunding — 5-year lump gift of $95,000 per beneficiary with no gift tax impact; (5) Charitable strategies — CLTs, CRTs, and Donor-Advised Funds (DAFs) reduce taxable estates while supporting causes. Note: state estate taxes have lower exemptions — Massachusetts and Oregon start at $1M. Source: IRS Form 706, IRS Publication 559, irs.gov/newsroom/estate-tax.
Frequently Asked Questions
What is the federal estate tax exemption in 2026?
The federal estate tax exemption for 2026 is $15,000,000 per person under the One Big Beautiful Bill (OBBB, P.L. 119-21, signed July 4, 2025). Without OBBB, the exemption would have sunsetted to approximately $7 million. Married couples can shelter $30M via portability. Source: IRS Publication 559, irs.gov/estate-gift-tax.
What is the federal estate tax rate in 2026?
The top federal estate tax rate is 40% on the taxable estate above the exemption. The rate structure is graduated (18%–40%) but in practice, almost all taxable estates owe the top 40% rate. State estate taxes are separate and may have lower exemptions. Source: IRS Form 706.
What would the estate tax exemption have been without OBBB?
Without OBBB, the TCJA's elevated exemption would have expired December 31, 2025. For 2026, the exemption would have reverted to approximately $7 million per person. Estates between $7M and $15M that were previously exempt would have faced 40% federal tax on the excess. OBBB prevented this cliff.
What is the gift tax annual exclusion in 2026?
The annual gift tax exclusion for 2026 is $19,000 per recipient. Gifts within this annual exclusion do not count against the $15M lifetime exemption and do not require filing Form 709. Married couples can combine exclusions for $38,000 per recipient per year via gift-splitting. Source: IRS Publication 559, IRC §2503(b).
How does estate tax portability work under OBBB?
Portability allows a surviving spouse to use the deceased spouse's unused estate tax exemption (DSUE). With $15M exemption per person, a married couple can effectively shelter $30M. The executor must elect portability on Form 706 within 9 months of death. Source: IRS Form 706, IRC §2010(c).