With the 2025 tax season during preparation, it is important to know which taxes will increase and which will decrease, and, this year, there is good news for those who need to file a return inheritance and gift taxes.

According to the Internal Revenue Service (IRS) “THE gift tax is a tax about the transfer of property by one individual to another without receiving anything, or less than the full value, in return. THE tax applies whether or not the donor intended the transfer to be a gift.
It applies to property, money, free or discounted use of an item in lieu of profit, sales at a price below the appraised value of the item, interest-free or reduced rate loans, etc. The intention behind the act does not need to be explicit for the action to be considered a gift by the IRS.

Who must pay tax on gift transfers?

In the case of gift taxesthe donor is generally responsible for paying the appropriate amounts. taxes. In some cases, the person receiving the taxes may offer to cover the amount, but this must always be done with the approval of a tax professional. Certain gifts such as tuition or medical expenses you pay for someone, gifts to your spouse, gifts to a political organization for its use, or gifts that do not exceed the annual exclusion for the calendar year are generally not subject to taxable rules.

THE IRS defines them as “Inheritance tax is a tax about your right to transfer property upon your death. It consists of an accounting of everything you own or in which you have some interest at the date of your death. The fair market value of these items is used, not necessarily what you paid to buy them or what their value was when you acquired them. The total of all these items is your “Raw domain.” Included property may consist of cash and securities, real estate, insurance, trusts, annuities, business interests, and other assets.

Of course, this doesn’t mean that everything you own is taxable, Certain items can be deducted from this list, such as mortgages, other debts, estate administration costs, property passing to surviving spouses and eligible charities, etc. Raw domain the less these deductions will give your taxable amount.

Who must pay taxes on inheritance transfers?

The good news for most Americans is that most people won’t. file taxes for one or other of these reasons. The only reason anyone should file an estate and gift taxes are those whose amount exceeds the “basic exclusion amount”.

In the case of inheritance taxes “A inheritance tax a declaration must be filed if the gross inheritance of the decedent (who is a U.S. citizen or resident), increased by the decedent’s adjusted amount taxable gifts and specific exemption from gift taxis assessed at an amount above the reporting threshold for the year of the deceased’s death, as shown in the table below.

This “basic exclusion amount” corresponds to any amount less than the tax thresholdwhich in 2024 amounted to $13.61 million in 2024. In 2025, this amount increased to $13.99 million per person in connection with the increase in the cost of living. But bad news is coming.

This amount is due to the implementation of the Tax Cuts and Jobs Act signed into law by former President Donald Trump, and it expires in 2025, meaning the “base exclusion amount” will return to 2017 levels ($5,490,000 per person), adjusted for inflation. This may be a blow to some, but the taxes will certainly help fund some of the programs that have been struggling for years due to lack of federal funding.