H.R. 1 Reshapes Estate Planning With $15 Million Exemption as CPAs Rework Gifting Math
Updated
Updated · The Tax Adviser · Oct 31
H.R. 1 Reshapes Estate Planning With $15 Million Exemption as CPAs Rework Gifting Math
1 articles · Updated · The Tax Adviser · Oct 31
Summary
$15 million per person and $30 million per couple exemptions, now permanent and inflation-indexed under H.R. 1, are pushing estate planners to weigh income-tax basis step-up against transfer-tax savings from lifetime gifts.
Fewer than 4,000 estates paid federal estate tax annually even before the change, so for many wealthy families the key question is no longer just cutting estate tax but deciding which assets to gift and which to hold until death.
Highly appreciating assets can still favor gifting—especially through intentionally defective grantor trusts—because removing future growth from the estate can outweigh the capital-gains cost of losing a basis step-up; one cited business grew from $500 million to $3 billion after transfers.
H.R. 1 also expanded planning around qualified small business stock and made opportunity zones permanent: the QSBS gain exclusion rose to $15 million for post-July 4, 2025 stock, while gifted QOF interests can preserve a later basis increase if transferred to a grantor trust.