Historical context. Archived May 2025 legislative update. The discussion below concerns proposals released before final legislation. It does not describe current law. For current federal guidance, see the IRS estate and gift tax resources linked below.
On May 9, Republicans on the House Ways and Means Committee released the first wave of their tax proposals as part of the overall budget reconciliation process. The Committee has scheduled a markup of tax reconciliation measures for May 13. As this is just the opening salvo, we expect new proposals, changes, and constant updates until the President signs a final bill.
- The unified estate and gift tax exemption is made permanent to an inflation-indexed $15 million for taxable years beginning after Dec. 31, 2025. The generation-skipping transfer tax exemption is also permanently increased to an inflation-indexed $15 million.
Other important proposals that you will find of interest are:
- Proposals making the rates for individuals, estates, and trusts enacted in the Tax Cuts and Jobs Act (TCJA) permanent with modifications for inflation. The expiration date of the standard deduction from TCJA is removed, and temporary increases in the standard deduction result in a deduction of $16,000 for individuals, $24,000 for heads of households, and $32,000 for joint returns. These increases would expire Jan. 1, 2029.
- For Homeowners, the $750,000 ($375,000 married individual filing separately) limitation on principal residence acquisition indebtedness is made permanent, as is the exclusion of interest on home equity indebtedness from the definition of qualified residence interest.
- Five modifications to qualified business deductions for pass-through entities under section 199A. These include making the deduction permanent and increasing the calculation amount from 20% to 22%. There is also the opportunity in some instances to apply the benefit to income derived from a specified service trade or business, which has historically been unavailable. An inflation index is also added after 2025.
Winne Banta Basralian and Kahn recommends that you schedule a meeting with one of the attorneys in our Tax, Trusts and Estates Department, which will allow you and your family to consider and finalize the most comprehensive and effective estate plan that fits your specific needs and goals. Do not overlook and forgo the value of the extra gifting power available to you while the exemption remains at a historical high.
Co-Chairs of the Tax, Trusts & Estates Department:
Martin J. Dever, Jr. mdever@winnebanta.com
Jonathan Kukin jkukin@winnebanta.com
Partners of the Tax, Trusts & Estate Department:
Arthur I. Goldberg agoldberg@winnebanta.com
Peter J. Bakarich, Jr. pbakarich@winnebanta.com
Doris Brandstatter dbrandstatter@winnebanta.com
Associates of the Tax, Trusts & Estate Department:
Marley A. Guerrera mguerrera@winnebanta.com
Sara E. N. Lerner slerner@winnebanta.com
Estate planning guidance for your family
Learn about Winne Banta’s tax, trusts and estates services, or contact the firm to discuss your circumstances.
For official information, review IRS estate and gift tax guidance.