Key changes in estate and gift tax exemptions and valuation rules for 2025 offer expanded benefits, though some are temporary:
- Estate and gift tax exemption: The lifetime exemption rises to $13,990,000 in 2025 but is slated to drop to about $7 million after that unless extended by Congress. Given recent GOP election victories, the current higher exemption may remain or increase.
- Farm and business real estate valuation: Up to $1,420,000 of qualifying real estate can receive a special discounted valuation based on current use instead of market value. To qualify, real estate must meet specific estate and usage thresholds.
- Installment payment breaks: Estates with closely held businesses exceeding 35% of total value can defer up to $760,000 in taxes at a 2% interest rate.
- Annual gift tax exclusion: The exclusion rises to $19,000 per done in 2025. For example, married couples with multiple relatives can gift up to $266,000 in total without triggering a gift tax return.
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