Currently, the United States has an "estate tax" -- a federal tax on the estate of a person who dies. As of 2024, this is administered in combination with a "gift tax" system. There is currently no direct federal tax on the person who inherits an estate ("inheritance tax").
It is possible to find statements indicating that only a few thousand estates each year pay any amount of estate tax. One reason for this is there is currently a large "exemption" of an estate from the estate tax. In 2024, the first $13.61 million of an estate is not taxed at all. Any excess portion of an estate valued at over $13.61 million would be taxed at a rate of 40%.
What will the estate tax exemption amount be in 2054?
This figure should include whatever combination of estate/gift/inheritance taxes exist in 2054, that would be equivalent to the current application in 2024. (So if the 2054 rules change from an estate tax to an inheritance tax, this resolves based on the exemption to that inheritance tax. Or if there is a combined estate/inheritance tax, or some other similar system.)
You could think of the question as something like "What is the largest estate you could pass to your heirs if you pass away in 2054, completely tax-free?", but we are not asking about what tax/estate planning you can do to pass a larger estate without taxes. Just the baseline, naive version of the question.
If there is no estate/gift/inheritance tax at all, resolves to "There is no estate/gift/inheritance tax in 2054"
If there is no exclusion, and even a $1 estate is taxed, resolves to $0
Note that this will be denominated in nominal dollars rather than real dollars, so take that into account as you forecast. It would be easier to predict the value today using real dollars, but by the time we're halfway to 2054, it will be harder to think about the question using real dollars since 2024 will be a long time in the past. (If you think we should use real dollars, try to convince me they make more sense.). For reference, $100 in 1994 (30 years ago) is probably worth a bit over $200 of 2024 money.
This is for a single person -- even if you could double the exemption with a married couple, we will focus on the amount of exclusion for the estate of a single person
Since rates can sometimes change through the year even when originally announced at the start of the year, this should resolve at the end of 2054 to confirm the final answer is correct.
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