As 2025 winds down, now is an ideal time for business owners to take a fresh look at their tax strategies, estate plans, charitable giving, and transition goals. There’s plenty to consider, and proactive planning before year-end can make a meaningful difference. Whether it’s refining a business transition plan or reviewing an estate strategy, thoughtful attention now can help start the new year on solid ground.
Below are several key items to consider in preparing for both year-end and long-term planning. Our Privately Held Businesses & Enterprises group brings together professionals across tax, estate planning, transitions, and transactions. We invite you to connect with our team for guidance or support as you plan for the close of 2025 and beyond.
Year-End Gift Giving
Estate Planning
Year-End Charitable Giving
Year-End Planning For Income Tax Issues
Business Transition Planning
Federal gift tax exemptions are at an all-time high. These are use-it-or-lose-it items that have year-end implications. Now is also the time to take advantage of valuation discounts that are available to closely held business interests. Assets to consider gifting in 2025 include:
- Marketable securities
- Business interests – including outright gifting and the use of family businesses and other entities to remove future appreciation from taxable estates. These entities can qualify for valuation discounts, which offer great opportunities to leverage estate and gift tax exemptions.
- Charitable gifts
- Appreciated long-term capital assets
Keep in mind that selecting, analyzing, and planning for lifetime gifts, especially substantial lifetime ones, takes time. Therefore, the sooner you start the process of planning, the better. For more on creating a legacy through lifetime gifting, see Commentary: Creating a Legacy Through Lifetime Gifting, published by Capital Press. An early start is especially critical for gifts that must be made by year’s end.
- Estate and Gift Tax Exemption: The current federal estate and gift tax exemption amount for 2024 is $13.61 million per person. This exemption is increased to $15 million per person beginning in 2026.
- Gifts: Estate planning lawyers and financial advisors can consult about whether a lifetime gift makes sense and, if so, whether it should be made before year-end.
- Check The Plan: The end of the year is a good time to review an estate plan and consider whether it should be revised. For more, see:
- Kids should have a plan: Those over 18 should think about what type of estate planning documents they might need. See The Grad Pack: Estate Planning for Newly Minted Adults.
- People who own natural-resource property that’s essential for a farming, forestry, or fishing business might benefit from a new Oregon estate-tax exemption. Families in these industries should review their estate and business succession plans to determine whether this exemption might benefit them. For more, see Oregon’s New Estate Tax Exemption for Family Businesses Engaged in Farming, Forestry, or Fishing Business.
There are many opportunities to make substantial charitable gifts that reduce taxes. When planning to make charitable gifts before year’s end, consider our Tips for Planning Charitable Giving.
Year-End Planning For Income Tax Issues
Individuals and business owners should meet with their tax and estate planning professionals before 2026 to discuss how they might be affected by changes to:
- Individual income tax rates—state and federal
- Carryback losses
- Basis or cost
- C corporation losses
- Corporate income tax rates—state and federal
- 1031 Exchanges
- Capital gain rates
- Suspension of required minimum distributions for qualified retirement plan accounts
- Section 1202 Qualified Small Business Stock
The business tax landscape for 2025 is further shaped by sweeping legislative changes introduced by the One Big Beautiful Bill. The most significant updates for privately held businesses include the permanent reinstatement of 100% bonus depreciation, a substantial increase in IRC §179 expensing limits, the introduction of a new 100% bonus depreciation regime for qualified production property, the restoration of immediate expensing for domestic research and experiment (“R&E”) expenditures, and significant changes to the rules related to clean energy tax credits. Transition rules and eligibility criteria accompany each of these provisions.
Additionally, Washington state made significant changes to its tax rules. The definition of “retail sales” was expanded to include several new business activities, such as advertising services, IT services, and custom website development services. Businesses operating in Washington are required to begin collecting sales tax on these additional services starting October 1, 2025. The B&O tax rates for several categories of business were increased, the capital gains tax now has two tiers, and estate tax rates on larger estates were raised substantially. Tax professionals can help assess the effect of these new laws on business and personal tax burdens and develop practical strategies to minimize overall tax liability.
2025 has been a roller coaster year, marked by early momentum that encountered headwinds from changes to economic and trade policies in the new administration, static interest rates, and other factors. While the mergers and acquisitions market has been slower to heat back up, deal opportunities are expected to improve heading into the final quarter of 2025 and 2026. The improving conditions will likely be fueled by healthy credit markets, surplus capital, and growing confidence within private equity, and a renewed appetite for strategic acquisitions.
M&A due diligence has trended deeper and longer, as buyers integrate broader diligence scopes and more authoritarian regulatory regimes, despite pockets of acceleration from the use of digital tools in diligence. Sellers who are prepared to withstand extensive due diligence are more likely to close successful transactions.
The final months of 2025 and 2026 promise to bring ample succession planning opportunities. Without comprehensive planning ahead of a business exit event, owners might see a substantial amount of proceeds from a sale evaporate through excess tax obligations or a misaligned post-closing wealth strategy. With the state tax landscape changing in Washington and other jurisdictions, there has never been a better time to engage in proactive planning to ensure that business structure and personal planning strategies are aligned to maximize the after-tax proceeds of a liquidity event. As a seller, implementing strategies ahead of a transaction can help mitigate taxes through effective deal structuring. For example, it could be beneficial to modify the corporate structure, transfer ownership to other generations, create personal trusts, or even redomicile to a different state. The further ahead of an exit transaction these strategies are considered, the more effectively they can be implemented.
We continue to see more succession plans that involve transition to key employees. These plans can be attractive when trusted key employees have an interest in—and are qualified to assume—an ownership role. They present an opportunity to keep the business within the employee “family” and to preserve the owners’ legacy. Sellers with the flexibility and appetite to finance these transitions are in a good position for success. Such plans are more difficult, however, where seller financing is not desired and the buyers lack the financial means to purchase.
Companies armed with a written transition plan are better prepared to seize attractive third-party opportunities when they arise, and are more likely to achieve successful internal transitions. Planning, including estate and gift planning, is critical. Owners who align their business transition plans with their personal wealth and estate planning usually have the best outcomes for their families and their businesses.
For more details, please visit the Schwabe Privately Held Businesses & Enterprises page.
Conclusion
To understand the full spectrum of proactive legal measures that can be pursued for estate planning and business succession, we encourage you to reach out to Privately Held Businesses & Enterprises team or Schwabe’s Tax and Estate Planning professionals.
This article summarizes aspects of the law and opinions that are solely those of the author. This article does not constitute legal advice. For legal advice that applies to your situation, you should contact an attorney.
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