For years, Atlanta families holding a high-value estate planned around a moving target. The federal estate tax exemption was elevated but scheduled to fall sharply at the end of 2025, and many owners of trophy homes braced for a much lower threshold. That uncertainty is now resolved. As of 2026, the federal estate and gift tax exemption sits at roughly $15 million per person and, for the first time in a while, carries no scheduled expiration.
For a family passing down a $5 million to $25 million Buckhead or in-town estate, this changes the planning math. Fewer families face a forced sale to cover an estate tax bill, and the decision to hold, gift, or sell a cherished home can be driven more by goals than by a looming deadline. It also raises new questions about how the estate tax interacts with capital gains, the step-up in basis, trusts, and the choice between keeping a home in the family or selling it.
This guide explains what changed, why the distinction between estate tax and capital gains tax matters, how Georgia fits in, and the tradeoffs of holding versus gifting versus selling a trophy estate. It is educational, not advice. Every figure here reflects 2026 rules and should be confirmed with the IRS and your own estate attorney and CPA before you act.
What Actually Changed in 2026
The change came from the One Big Beautiful Bill Act (OBBBA), signed July 4, 2025. According to the Internal Revenue Service, estates of decedents who die during 2026 have a basic exclusion amount of $15,000,000, up from $13,990,000 for estates of those who died in 2025. The law applies the same exemption to gift and generation-skipping transfer taxes.
Two features matter most for trophy-home owners. First, the figure is per individual, so a married couple can shield a total of roughly $30 million. According to Morgan Lewis, the exemption is set at $15 million per individual for 2026 gifts and deaths and will continue to be indexed annually to inflation. Second, the prior law set the elevated exemption to expire after 2025, and OBBBA removed that scheduled sunset.
That is why the new exemption is described as permanent. It is worth being precise about what permanent means here. It means there is no automatic expiration date built into the law, not that the figure can never change. Any future Congress could amend it, and Morgan Lewis itself notes that provisions of the Act could be amended or repealed in the future. Treat $15 million as the figure as of 2026, expect it to rise with inflation, and confirm the current number with the IRS or your advisor before making a decision.
Estate Tax and Capital Gains Tax Are Not the Same Thing
This is the single most important distinction in the entire discussion, and conflating the two leads to expensive mistakes. They are different taxes, computed under different rules.
Estate tax is a transfer tax. It applies to the value of what passes at death above the exemption. With the exemption at roughly $15 million per person as of 2026, an estate below that threshold generally owes no federal estate tax, and an estate above it may owe tax on the excess.
Capital gains tax is an income tax on the profit from selling an asset. It is measured against the asset's cost basis. For a home, the gain is roughly the sale price minus what is treated as the owner's basis in the property.
These interact, but they are separate calculations. A family can owe estate tax and capital gains tax, one but not the other, or neither, depending on the size of the estate, the basis of the assets, and when and whether heirs sell. The figure that resolves estate tax exposure says nothing on its own about a future capital gains bill. The mechanism that connects them for inherited property is the step-up in basis, covered next.
The Step-Up in Basis, in Plain Terms
- It resets basis at death. Under Internal Revenue Code Section 1014, most assets in a decedent's estate receive a basis adjustment to fair market value at the date of death. For a home bought decades ago, that can reset the taxable gain near zero as of that date.
- It is an income tax benefit, not an estate tax benefit. The step-up helps with capital gains for heirs. It does not reduce or eliminate estate tax on its own. The two operate separately.
- It can dramatically cut a future capital gains bill. An heir who sells shortly after inheriting may owe little or no capital gains tax on appreciation that occurred during the owner's lifetime, because the basis was reset near the sale price.
- Gifting during life usually loses it. A home gifted during your lifetime generally carries over your original basis to the recipient, who may face a large gain if they later sell. Holding until death is what triggers the step-up.
- Trust structure matters. Whether assets in a trust receive a step-up depends on the type of trust and whether they remain in your taxable estate. This is a design question for your attorney.
Where Georgia Fits In
For Atlanta families, the state picture is straightforward. According to the Georgia Department of Revenue, on and after July 1, 2014, there are no estate taxes levied by the state and no state estate tax return is required. Georgia also has no separate inheritance tax, so heirs do not pay a state-level tax simply for receiving property.
In practice, this means the only estate tax a Georgia family typically faces is the federal one. It is one reason Georgia can be an efficient state in which to hold and pass down a high-value estate. That said, the absence of a state estate tax does not erase federal rules, and your situation may be more complex if you own real estate in other states, recently relocated, or hold assets connected to states that do impose their own estate or inheritance taxes. A few states still do. Confirm your full picture with a Georgia estate attorney rather than assuming the home is the only consideration.
Hold, Gift, or Sell: The Real Tradeoffs
With estate tax exposure easier as of 2026, the choice for a trophy-home owner comes down to a few paths, each with its own tax and practical consequences. None is universally right.
Hold the home until death. For many families whose estates are comfortably under the exemption, this is often the most tax-efficient path. Heirs generally receive the step-up in basis, which can sharply reduce or eliminate capital gains tax if they later sell. The home passes through the estate, and with the higher exemption, many estates owe no federal estate tax. The tradeoff is that the asset stays illiquid, and a home is harder to divide among multiple heirs than cash.
Gift the home during your lifetime. Gifting can remove the home and its future appreciation from your taxable estate, which can help very large estates that expect to exceed the exemption. The catch is basis. The recipient typically takes a carryover basis equal to your original cost, so if they sell, they may face capital gains on decades of appreciation that a step-up would otherwise have erased. Gifting also uses part of your lifetime exemption and generally requires a gift tax return. For estates well under the threshold, gifting the home often trades away a valuable step-up for an estate tax benefit you may not need.
Sell the home, on your terms. Some owners prefer to sell an illiquid trophy estate during their lifetime. Selling can simplify the estate, allow diversification, and let heirs eventually inherit cash or a smaller, easier-to-divide property. A lifetime sale is a taxable event measured against your basis, so capital gains may apply, but it removes the future problem of heirs trying to split or maintain a large home. For owners who were already considering a move, the higher exemption removes one source of pressure and lets timing follow personal goals. If a sale is part of your thinking, our team can help you understand current pricing and positioning through our home selling services.
The right path depends on the size of your full estate, your basis in the home, your family situation, and your goals for the property. This is the part to model carefully with an estate attorney and CPA rather than decide on instinct.
Trusts, Portability, and Keeping the Plan Current
Two technical tools come up constantly in trophy-home planning, and both are easy to misunderstand.
Trusts. A revocable living trust is commonly used to avoid probate and ease the transfer of a home. Assets in it generally remain in your taxable estate and typically still receive a step-up in basis at death. Certain irrevocable trusts are used by larger estates to move assets and future appreciation out of the taxable estate, but assets transferred that way during life may not receive a step-up, creating a tradeoff between estate tax savings and basis. There are many variations, and the rules are technical. The practical point is that the structure determines whether you capture the estate tax benefit, the step-up, both, or neither, so a trust holding a high-value home should be designed by a qualified estate attorney for your facts.
Portability. Married couples can preserve a deceased spouse's unused exemption, often called the deceased spousal unused exclusion, and combine it with the survivor's own. According to the IRS, this portability is not automatic. The estate of the first spouse to die must file an estate tax return (Form 706) and make a timely election, even when no estate tax is otherwise due. Families sometimes skip this filing because no tax seems owed, then lose access to the first spouse's exemption later. If preserving a spouse's exemption is part of your plan, this election is a step your advisor should flag at the first death.
Keep it current. Even a permanent exemption is not static. The figure is indexed to inflation, future law can change, and your own circumstances move as home values shift, assets change, and families grow. A common practice is to review the plan every few years and after any major life or financial event, keeping the documents, the titling of the home, and any trust structures aligned with current law and your wishes.
Before You Decide on a Trophy Estate
- Tally your full estate, not just the house. Investment accounts, business interests, retirement assets, other property, and life insurance you own can all count toward the threshold.
- Separate the two taxes. Model estate tax and capital gains tax independently. The step-up affects income tax for heirs; it does not reduce estate tax on its own.
- Plan for liquidity. If a taxable estate is concentrated in an illiquid home, build in a way to cover any tax due without a forced sale on a tight timeline.
- Confirm the current figures. The $15 million exemption reflects 2026 and is indexed to inflation. Verify the number in effect when you act with the IRS and your advisor.
- Build a small team. An estate attorney and CPA handle the tax and legal design; a real estate professional helps if a sale is part of the plan.
If Selling Is Part of the Plan
For some families, the cleanest path is a sale on the owner's terms. With less pressure from estate tax as of 2026, an owner who wants to simplify can sell a large home during life, diversify the proceeds, and spare heirs the difficulty of splitting or maintaining an illiquid asset. Others arrive at a sale during the settlement of an estate, when heirs decide the home is not one they want to keep.
Either way, the transaction itself deserves care. A high-value estate has different cost considerations than a typical sale, which we cover in our guide to the cost to sell a luxury Atlanta home. Families who want privacy or a discreet process sometimes explore quieter channels, which we discuss in our overview of how to find off-market luxury listings in Atlanta. And for the broader picture of how a trophy property fits into a long-term plan, see our guide to Atlanta estate planning and real estate.
Whatever direction you lean, the tax design should come from your attorney and CPA, and the real estate side from a professional who works with trophy estates. If you want to talk through positioning, timing, or what your home might command in the current market, you can connect with an agent to discuss your specific situation.
Frequently Asked Questions
What is the 2026 federal estate tax exemption, and is it really permanent?
According to the IRS, estates of decedents who die during 2026 have a basic exclusion amount of $15,000,000 per individual, up from $13,990,000 in 2025. The One Big Beautiful Bill Act (OBBBA), signed July 4, 2025, set this $15 million figure and removed the prior scheduled sunset, which is why it is widely described as permanent. As Morgan Lewis notes, a married couple can shield a total of $30 million, and the amount will continue to be indexed annually for inflation. Permanent in this context means there is no automatic expiration, not that it can never be changed. Any future Congress could amend it. Treat $15 million as the figure as of 2026 and confirm the current number with the IRS and your advisor before acting.
Does Georgia have its own estate or inheritance tax on a trophy home?
No. According to the Georgia Department of Revenue, on and after July 1, 2014, there are no estate taxes levied by the state and no state estate tax return is required. Georgia also has no separate inheritance tax, so heirs do not pay a state tax simply for receiving property. The only estate tax a Georgia family typically faces is the federal estate tax. This is one reason Georgia can be an efficient state in which to hold and pass down a high-value estate, though federal rules still apply and your situation may involve assets or prior residency in other states. Confirm your specific exposure with a Georgia estate attorney.
What is the step-up in cost basis, and how is it different from the estate tax?
These are two different taxes, and conflating them is a common and costly mistake. The estate tax is a transfer tax on the value of what passes at death above the exemption. The step-up in basis affects income tax, specifically capital gains. Under Internal Revenue Code Section 1014, most assets included in a decedent's estate receive a basis adjustment to fair market value at the date of death. For a home bought decades ago, that can reset the taxable gain for heirs to roughly zero as of the date of death, so an heir who sells shortly after may owe little or no capital gains tax on appreciation that occurred during the owner's lifetime. The step-up is generally favorable for income tax, but it does not reduce or eliminate estate tax on its own. The two operate separately.
If my estate is under $15 million, do I still need to worry about estate tax?
Probably not from a federal estate tax standpoint as of 2026, but the figure is per individual and your estate is the sum of everything, not just the house. A trophy home is often only one piece. Investment accounts, business interests, retirement assets, other real estate, and life insurance you own can all count toward the total. A single owner with a $9 million Buckhead estate and several million more in other assets can approach or exceed the threshold faster than expected. Estate tax is also not the only reason to plan. Probate, basis planning, liquidity to cover any tax due, and a clear succession plan for an illiquid asset like a large home all matter even when no estate tax is owed. Have an advisor tally your full estate.
Should I gift my Atlanta trophy home to my children now or hold it until death?
There is a genuine tradeoff, and the right answer depends on your numbers and goals. Holding the home until death generally lets heirs receive a step-up in basis to fair market value, which can sharply reduce or eliminate capital gains tax if they later sell. Gifting the home during your lifetime removes future appreciation from your estate, which can help very large estates that expect to exceed the exemption, but the recipient typically takes your original cost basis (a carryover basis), which can mean a large capital gains bill if they sell. For many families whose estates are comfortably under the exemption, holding for the step-up is often the more tax-efficient path, but this is exactly the kind of decision to model with an estate attorney and CPA rather than decide on a rule of thumb.
How does putting the home in a trust affect estate tax and the step-up?
It depends entirely on the type of trust, and the differences are significant. A revocable living trust is commonly used to avoid probate and ease transfer, and assets in it generally remain in your taxable estate and typically still receive a step-up in basis at death. Certain irrevocable trusts are used by larger estates to move assets and future appreciation out of the taxable estate, but assets given away during life through some of those structures may not receive a step-up, creating a tradeoff between estate tax savings and basis. There are many trust variations, and the rules are technical. The point for a trophy-home owner is that the trust structure drives whether you get the estate tax benefit, the step-up, both, or neither. This must be designed by a qualified estate attorney for your facts.
What is portability, and how do married couples use it?
Portability lets a surviving spouse use the deceased spouse's unused exemption, often called the deceased spousal unused exclusion or DSUE. Combined with each spouse's own exemption, a married couple can shield up to roughly $30 million as of 2026. According to the IRS, portability is not automatic. The estate of the first spouse to die must file an estate tax return (Form 706) and make a timely portability election, even when no estate tax is otherwise due. Families sometimes skip this filing because no tax seems owed, then lose the ability to use the first spouse's exemption later. If preserving a spouse's exemption matters to your plan, the Form 706 portability election is a step your advisor should flag at the first death.
Does the estate tax exemption interact with capital gains tax when heirs sell the home?
Yes, but as two separate calculations. When heirs inherit and later sell a trophy home, estate tax (if any) is assessed on the value passing at death above the exemption, while capital gains tax on a later sale is measured against the heir's basis, which is generally the stepped-up fair market value at the date of death under Section 1014. Because of the step-up, an heir who sells shortly after inheriting may have little gain to tax, since the basis was reset near the sale price. An heir who holds the home for years and sees further appreciation could owe capital gains on that later growth. The two taxes are computed under different rules, so model both with a CPA rather than assuming one figure covers everything.
Is now a good time to sell a trophy estate given the higher exemption?
The exemption change does not, by itself, make selling better or worse, but it can simplify a decision you were already weighing. With a higher and permanent exemption, fewer families face a forced sale to cover estate tax, which means the choice to hold, gift, or sell can be driven more by your goals than by a tax deadline. Some owners prefer to sell an illiquid trophy home during their lifetime to simplify their estate, diversify, and let heirs inherit cash or a smaller property that is easier to divide. Others prefer to hold for the step-up. There is no single right answer. If a sale is part of your thinking, our team can help you understand current pricing and positioning, and your attorney and CPA can model the tax side.
What happens if my estate exceeds the exemption and most of it is the house?
This is the liquidity problem, and it is worth planning for early. If a taxable estate is concentrated in an illiquid asset like a large home, the estate may owe tax that cannot easily be paid without selling the property, sometimes on a tight timeline. Families address this in several ways, including life insurance held appropriately to provide liquidity, gifting strategies during life, certain trust structures, or planning a sale on the owner's terms rather than a forced one. Each approach has tradeoffs and technical requirements. The worst outcome is heirs discovering a tax bill they cannot cover and being forced to sell a cherished estate quickly into whatever market exists at the time. An estate attorney and CPA can help build liquidity into the plan in advance.
How often should I revisit my estate plan now that the exemption is permanent?
Even with a permanent exemption, an estate plan is not set and forget. The exemption is indexed to inflation, so the dollar figure will rise over time, and a future Congress could change the law. Beyond the law, your own circumstances move. Home values in Buckhead and across Atlanta change, you may acquire or sell assets, and family situations evolve through marriage, divorce, births, and deaths. A common practice is to review the plan every few years and after any major life or financial event. The goal is to keep the documents, the titling of the home, and any trust structures aligned with current law and your current wishes, rather than discovering a gap after it is too late to fix.
Who should I actually talk to before making a decision about my estate?
For anything involving a high-value estate, build a small team: a Georgia estate planning attorney to design the documents and structures, and a CPA or tax advisor to model the estate tax, gift tax, and capital gains consequences of holding, gifting, or selling. If a sale of the home is part of the plan, a real estate professional experienced with trophy properties can help with pricing, timing, and positioning. This article is educational and intentionally avoids prescribing a strategy, because the right move depends on your full financial picture, your family, and rules that can change. The dollar thresholds here reflect 2026 figures. Always confirm current numbers with the IRS and your own advisors before acting.
Planning the Future of a Trophy Estate?
Whether you are weighing whether to hold, gift, or sell a high-value Atlanta home, our team can help you understand current pricing and positioning, and coordinate with your estate attorney and CPA on the real estate side of the plan.
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Sources
- Internal Revenue Service, 2026 inflation adjustments — IRS.gov. Estates of decedents who die during 2026 have a basic exclusion amount of $15,000,000, up from $13,990,000 for 2025, reflecting amendments from the One, Big, Beautiful Bill.
- Morgan Lewis, increased gift and estate tax exemption amounts for 2026 — MorganLewis.com. The exemption is $15 million per individual for 2026 gifts and deaths, a married couple can shield $30 million, and the amount remains indexed annually to inflation.
- Georgia Department of Revenue, Estate Tax FAQ — dor.georgia.gov. On and after July 1, 2014, there are no state estate taxes levied and no state estate tax return is required.
- Internal Revenue Service, Frequently Asked Questions on Estate Taxes — IRS.gov. Portability of the deceased spousal unused exclusion requires a timely filed estate tax return (Form 706) and is not automatic.
- Internal Revenue Code Section 1014, Basis of property acquired from a decedent — the step-up in basis adjusts the basis of most inherited assets to fair market value at the date of death, a provision affecting income (capital gains) tax that is separate from the estate tax.
Dollar thresholds reflect figures in effect for 2026 and are indexed to inflation thereafter. Tax law and exemption amounts may change. Confirm the current figures with the IRS and your own advisors before acting. This article is for informational purposes only.
Disclaimer: This article is for informational and educational purposes only and does not constitute legal, tax, financial, or estate planning advice. Estate tax, gift tax, and capital gains rules are technical, depend on individual circumstances, and may change. Estate tax and capital gains tax are different taxes computed under different rules and should not be conflated. Always verify current exemption amounts and rules with the IRS, and consult a qualified estate planning attorney and a CPA or tax advisor before making any decision about holding, gifting, titling, or selling a high-value estate. The Luxury Realtor Group is a real estate brokerage and does not provide legal, tax, or estate planning advisory services.