The IRS has increased the estate and gift tax exemption for 2025.

• The IRS announced a higher estate and gift tax exemption for 2025.
• The "basic exclusion amount" will increase to $13.99 million in 2025, from $13.61 million in 2024, according to the agency.
• The exemptions apply to tax-free transfers during life and at death.

For 2025, the Internal Revenue Service has raised the estate and gift tax exemption.

The "basic exclusion amount" will increase to $13.99 million per person in 2025, from $13.61 million in 2024, the agency announced on Tuesday. These exemptions cover tax-free transfers during life and at death.

The IRS increased figures for various provisions, including federal income tax brackets, long-term capital gains tax brackets, and eligibility for the child tax credit, among others.

The higher estate and gift tax exemption enacted by former President Donald Trump will expire in 2025 unless Congress takes action. If the provision expires, the exclusion will revert to 2017 levels, adjusted for inflation. The Tax Cuts and Jobs Act doubled the exemption to $11.18 million in 2018, according to the Tax Policy Center.