OBBBA and Inheritances: What Changes in 2025
Key Changes for this Year
The One Big Beautiful Bill Act (OBBBA), signed in July 2025, doesn’t just affect businesses and real estate. It also introduces significant updates to inheritance and estate planning, changing the rules on how much wealth you can transfer tax-free and how the IRS handles donations and inheritances together.
If you own property, investments, or plan to pass down your estate, these changes could directly impact your U.S. taxes and the way you plan for your heirs.
OBBBA Changes in Inheritance
Higher Lifetime Exemption
The OBBBA raised the lifetime exemption to $13.99 million per person in 2025. This amount sets the threshold you can transfer during your lifetime or at death without triggering federal estate tax.
For families with real estate, investment portfolios, or family businesses, this offers more breathing room. However, amounts above this threshold will still be subject to federal estate tax at rates of up to 40%.
Connection with the Gift Tax
The Estate Tax and Gift Tax are tied together. Anything you gift during your lifetime above the annual exclusion of $19,000 per person in 2025 reduces your lifetime exemption.
This means the IRS keeps a combined record of both your gifts and your estate. If you don’t properly report gifts using Form 709, you risk miscalculating how much of your estate will be taxable when you pass away.
“Step-Up in Basis” Remains in Place
One of the most favorable rules that the OBBBA keeps intact is the step-up in basis. When heirs receive assets, the tax basis is adjusted to the fair market value on the date of death.
This prevents heirs from being taxed on gains that accumulated during the decedent’s lifetime, reducing their tax burden and making it easier to calculate future capital gains if they sell the inherited assets.
Stricter Rules for International Inheritances
The OBBBA also tightens rules for international coordination. If you have assets abroad or heirs outside the U.S., the IRS will apply stricter oversight between U.S. tax law and international tax treaties.
This means:
U.S.-situs assets (property located in the U.S.) may be taxed even if the heir lives abroad.
Cross-border transfers require more documentation to avoid double taxation.
Families with global assets may need to consider international trusts, corporate structures, or legal reviews to optimize tax exposure.
What You Can Do Now
Review your total estate value against the new 2025 thresholds.
Coordinate lifetime gifts with your estate plan so you don’t double-count.
Make sure to file Form 709 for gifts above the annual exclusion.
If you have foreign assets, check how they interact with U.S. tax treaties.
Work with a bilingual CPA to build a safe, tax-efficient estate transfer strategy.
At Jambrina CPA, We Help You Plan with Strategy
With the OBBBA, estate planning is more technical but also more favorable if done correctly. At Jambrina CPA, we help you:
Calculate lifetime exemptions and coordinate with Gift Tax
File Form 709 accurately for lifetime gifts
Plan estates for heirs in the U.S. and abroad
Build bilingual tax and accounting strategies to protect your legacy
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