The Big Beautiful Tax Bill: What It Means for Your Estate Plan in 2025
As Congress debates a sweeping tax reform package – yes, officially called the One Big Beautiful Bill (OBBB) – many families, business owners, and high-net-worth individuals are wondering: What does this mean for me?
Let’s walk through the key provisions affecting estate planning, taxes, and wealth transfer—and why now is the time to act, not wait.
Estate & Gift Tax Exemption: Expansion or Expiration?
Right now, the federal estate and gift tax exemption is historically high—$13.99 million per person in 2025. But that’s scheduled to drop to around $7 million in 2026 unless Congress steps in.
· The House version of the OBBB proposes raising the exemption to $15 million per person ($30 million per couple), starting in 2026
· The Senate version... doesn’t. They’re delaying a decision, leaving the 2026 drop very much on the table
If you’ve been putting off your gifting or trust planning, this could be your last, best chance to lock in the high exemption amount.
Capital Gains Surtax: Trouble for Big Liquidity Events
The bill proposes a new surtax on large capital gains—think selling a business, cashing out of real estate, or liquidating investments. Details are still being debated, but the surtax could mean a much larger tax bill for people triggering multi-million-dollar gains.
If you’re planning a big exit or liquidity event, now is the time to consider:
· Installment sales
· Charitable trusts
· Gain deferral strategies
AMT, QBI, SALT – What’s Changing?
· Alternative Minimum Tax (AMT): No repeal, but both versions increase the exemption and phase-out thresholds.
· Qualified Business Income (QBI) Deduction: Expands from 20% to 23% for pass-through business owners – though the Senate adds restrictions for service professionals.
· State and Local Tax (SALT) Deduction: Increases to $40,000 for joint filers, but phases out for incomes over $500,000.
If you’re in California or another high-tax state, the SALT increase could be a meaningful deduction opportunity – if you stay under the cap.
Bonus Depreciation & Business Deductions
The bill restores 100% bonus depreciation for qualified property placed in service from January 19, 2025 through 2030. This gives businesses a big incentive to make capital investments now—and possibly lower taxable income ahead of a liquidity event or transition.
International Provisions: A “Revenge Tax” for Foreign Holders
A new provision allows the IRS to impose up to a 20% tax on U.S. investment income held in foreign jurisdictions deemed uncooperative (like the Cayman Islands or Luxembourg). If you’re using offshore structures to hold U.S. real estate or securities, this may change the math significantly.
Odd Additions: MAGA Accounts, Car Loans & 529s
There’s also a grab bag of other provisions, including:
· MAGA Accounts: $1,000 newborn savings accounts for U.S.-born children, with optional $5,000/year parental contributions.
· Car Loan Interest Deduction: For U.S.-assembled vehicles only.
· 529 Plan Expansion: Now includes K-12 and homeschool expenses.
· Repeal of Solar and EV Credits: But nuclear energy incentives stay.
The Bottom Line
Whether or not this bill passes in its current form, the writing is on the wall: tax advantages are tightening, especially for those with substantial assets.
Don’t wait until the end of the year—or until after Congress acts—to get your estate and tax strategy in place. Whether it’s gifting, trust creation, selling a business, or adjusting deductions, early planning gives you more tools and fewer surprises.
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