Based on 2025 legislative developments, Donald Trump has not fully repealed the estate tax but has significantly increased the exemption through the "One Big Beautiful Bill". As of July 2025, the law sets the 2026 federal estate tax exemption to $15 million per person ($30 million for couples), indexed for inflation, effectively making it a permanent, high-level exemption rather than a total repeal.
On February 13, 2025, Republican lawmakers in the House of Representatives and the Senate introduced the Death Tax Repeal Act (the “Act”). The Act aims to permanently eliminate the federal estate tax, often referred to as the “death tax,” and would significantly alter the future landscape of estate taxation.
This Act may be cited as the “Death Tax Repeal Act of 2025”. SEC. 2. Repeal of estate and generation-skipping transfer taxes.
The main 2026 estate tax change is a significant permanent increase in the federal gift and estate tax exemption to $15 million per person, enacted by the "One Big Beautiful Bill Act (OBBB)" (Public Law 119-21), allowing couples to shield up to $30 million; this effectively locks in higher exemption levels that would have otherwise reverted, making it a key time for wealth transfer planning, with unchanged top rates and annual gift exclusions.
If the individual tax cuts expire, taxpayers in all income groups would face higher and more complicated taxes. Machinery and equipment expensing is a key provision that, if allowed to expire, would especially harm capital-intensive industries like manufacturing.
Starting Jan. 1, 2026, the basic exemption amount increases to $15 million per person. Any remaining unused exclusion amount upon a married person's death is portable and transferred to the surviving spouse, effectively sheltering $30 million from federal estate and gift tax for a married couple.
The standard deduction increased for 2025 and 2026, and a new temporary “bonus” deduction for adults 65 and older begins in 2025. The child tax credit increased to $2,200 for the 2025 and 2026 tax years; retirement plan contribution limits for IRAs and 401(k)s also increased for 2026.
Yes, in 2024, each parent could gift $18,000 to a child (totaling $36,000 per child for the couple) without tax implications, and for 2025, that amount increased to $19,000 per parent ($38,000 per child) because the annual gift tax exclusion is adjusted for inflation, requiring separate checks for each parent to utilize the full amount, according to TurboTax, Yahoo Finance, Guardian Life, IRS (.gov), and Mercer Advisors.
When someone dies, their assets become an estate. For 2025, only the portion of an estate above $13.99 million per person — a limit that also absorbs any large gifts made while someone is alive — is subject to the federal estate tax, and only the value over the exemption is taxed, at rates that top out at 40 percent.
Recent legislative efforts, such as the Death Tax Repeal Act of 2025, aim to end the estate tax for good. Republicans are once again pushing to do away with the federal estate tax, which many of them have branded a “death tax” in their efforts to overturn something that, on paper, is relevant to few Americans.
You can typically inherit a very large amount from your parents before hitting federal estate tax thresholds, which are around $15 million per individual in 2026, meaning most heirs receive tax-free inheritances because estates rarely exceed this limit; however, some states have their own estate or inheritance taxes, and income from inherited assets (like IRAs or rental income) is usually taxable, according to this U.S. Bank article, this Fidelity article, this Domain Money article, and this Tax Foundation article.
1. Transfers and Gifts
You can typically inherit a large amount without federal taxes because the tax applies to the deceased's estate, not the recipient, and the exemption is very high: $13.99 million in 2025 and $15 million in 2026 per person, meaning most inheritances fall below this threshold. The key is that the estate's total value must exceed these limits for any tax to be owed by the estate. Inheritances themselves (cash, property) are generally not income, but earnings on them (like interest/dividends) or pre-tax retirement funds (like IRAs) are taxable.
The new law will increase the estate tax exemption to $15 million for single people and $30 million for couples in 2026 and allow it to rise with inflation moving forward. In other words, a couple will be able to leave $29.99 million to their heirs in 2026 without paying a cent of estate tax.
At a glance:
Any gifts exceeding $19,000 in a year must be reported and contribute to your lifetime exclusion amount. You can gift up to $13.99 million over your lifetime without paying a gift tax on it (as of 2025).
Step-Up in Basis for Inherited Assets
One tax advantage of leaving assets after death is the step-up in basis. This provision allows heirs to inherit assets at their fair market value at the time of death, effectively resetting the capital gains tax to zero for any appreciation during the decedent's lifetime.
The Tax Cuts and Jobs Act reduced tax rates for taxpayers across all income levels, on average. If Congress allows the TCJA to expire as scheduled, most aspects of the individual income tax would undergo substantial changes, resulting in more than 62 percent of tax filers experiencing tax increases in 2026.
The One Big Beautiful Bill Act (OBBBA) or the Big Beautiful Bill (P.L. 119-21), is a U.S. federal statute passed by the 119th United States Congress containing tax and spending policies that form the core of President Donald Trump's second-term agenda. The bill was signed into law by Trump on July 4, 2025.