Special Report: One Big Beautiful Bill Act

Just hours before the self-imposed deadline of July 4, 2025, President Donald Trump signed the One Big Beautiful Bill Act (“OBBBA”) with sweeping reconciliations using the 2017 Tax Cuts and Jobs Act (“TCJA”) as a foundation with new renovations. Supporters believe it will stimulate growth, while critics have voiced concerns over fiscal restraint. Regardless, let’s unpack some key provisions, associated wealth planning opportunities, and potential portfolio considerations.

The Congressional Budget Office, a nonpartisan organization, forecasts the OBBBA to add $3.3 trillion more debt over the coming decade.

Estate Planning

For wealthy households, the changes made to the estate, gift, and GST tax exemption could be the most promising development to come out of the OBBBA. Exemptions were more than doubled, allowing exemptions of up to $15M for individuals and $30M for married couples starting in 2026, indexed for inflation, and without a scheduled expiration date. This provides plenty of time to optimize your multi-generational wealth transfer strategy.

While this doesn’t necessarily introduce any new tactics for your estate planning purposes, it deepens the amount of tax-advantaged wealth you can pass on. Sophisticated trusts (e.g., GRATs, CLATs, dynasty trusts) can be highly beneficial, as they’re considered separate taxpayers. Such an approach could tactically allocate income, deductions, and state residency for a more efficient overall estate plan.

State and Local Taxes (“SALT”)

Deductions for SALT have temporarily increased from a baseline of $10,000 to $40,000, increasing 1% annually for anyone making less than $500,000 a year—in 2030, they revert back.

Given the sunset date, it could be beneficial to reconsider when and where you’ll be claiming income and deductions to fall under the threshold limit between 2025 and 2029. Pass-through entities maintain their value—particularly in high-tax states—as they can help circumvent SALT taxes to effectively create a full deduction by paying it on behalf of their owner.

Full Depreciation

Entrepreneurs—particularly those making capital-intensive investments into real estate, infrastructure, manufacturing, and equipment—will likely be pleased by the return of 100% bonus depreciation.

This change will enable business owners and real estate investors to benefit from large, accelerated depreciation losses in the first year of purchase, leading to a potential significant reduction in taxable income. Depending on your circumstances, it might be wise to amend corporate returns for post-2022 open years to claim refunds. Beyond that, it’s generally recommended to coordinate qualified investments with revenue projections based on the effective dates for new limits on expensing and bonus depreciation.

Bracket Management

The individual income tax rates introduced in the TCJA, which peak at 37% for top earners, were set to expire after 2025. The OBBBA has now made them permanent, and they’ll continue to be indexed to inflation.

More immediately, those in the highest tax bracket may want to consider accelerating payments of deductible expenses into 2025 to avoid the reduced benefit of itemized deductions moving forward. Beyond that, and given the sheer scope of the OBBBA and the tax-advantaged opportunities it presents, bracket management in general will be vital. Taking advantage of the correct provisions and deductions at the ideal time can have an outsized impact on long-term wealth accumulation, preservation, and eventual distribution—we’re here to make sure your plan is updated, enacted, and efficient.

Portfolio Considerations

Markets are simply an aggregate response to developments that could either help or hinder them—and they are often very good at assigning probabilities. Investors “price in” forecasts en masse, but it’s worth noting that sweeping bills like these take time to flow through the economy and move much slower than anticipated.

For this reason, we don’t necessarily view the OBBBA as bullish or bearish for investing, especially not immediately. Economic benefits may very well arise by helping the affluent keep more money in their hands to spend and invest, but stocks—as a function of anticipatory market behavior—typically register these tailwinds well before the legislative effects are felt. The 2017 tax cuts are a recent, reliable example.

The bill has been passed, leaving one less variable for investors to digest. In our experience, it’s not that clarity moves markets; uncertainty simply stalls the logic behind them. From a wealth management perspective, the focus should not be on portfolio adjustments at this point in time, but on financial planning ones.

Appendix 1: Sample Planning Strategies

Multi-Year Gifting Strategy

Situation: A client seeks to pass maximum wealth to heirs with minimum tax.

• Action: Utilize the new $15M per-person exemption starting in 2026.
• Strategy: Begin gifting before exemption inflation kicks in to shelter more assets from estate tax over time. Consider sophisticated trusts (GRATs, CLATs, dynasty trusts) for further leverage.

Example: The Smith family coordinates staggered family trust gifts across multiple years, using annual exclusions and the increased exemption to transfer $30M+ tax-free.

Pass-Through Entity SALT Workaround
Situation: High-income client in a state with high personal income tax faces federal SALT deduction cap between 2025 and 2029.

• Action: Elect to pay state taxes at the pass-through entity level (PTET) if the state allows.
• Strategy: Deduct full state tax payments through the business, bypassing the individual SALT cap for federal taxes.

Example: Client’s LLC makes a PTET election, allowing $120,000 of state tax to be deducted at the entity level—far exceeding the $40,000 personal SALT cap.

Real Estate or Business Acquisition with Bonus Depreciation

Situation: Entrepreneur or investor plans a major real estate purchase or capital equipment investment.

• Action: Leverage 100% permanent bonus depreciation and Section 179 expensing.
• Strategy: Align large purchases to maximize first-year deductions. For business owners, revisit open tax years post-2022 for possible retroactive claims.

Example: An LLC invests in new production equipment; the entire purchase is written off in the first tax year, freeing up capital for further business growth.

Opportunity Zone Investment Timing

Situation: Investor wants to optimize gains deferral and tax-free growth.

• Action: Target investments in newly redesignated Opportunity Zones starting December 2027.
• Strategy: Plan ahead to identify qualifying tracts and comply with reporting. Use rolling deferral for gains reinvested in QOFs.

Example: Client rebalances portfolio to realize gains, then reinvests into a new rural Opportunity Zone, deferring tax and positioning for potential exclusions.

Appendix 2: Key Provisions