The Big Beautiful Bill Act Is Now Law

Insights

What It Means for Individuals, Business Owners, and Long-Term Strategy

On July 4, 2025, the One Big Beautiful Bill Act (OBBBA) was signed into law—bringing significant tax, education, and estate planning changes that will shape financial decisions for years to come.

From expanded tax incentives to student loan reforms, the OBBBA impacts both individuals and entities across a wide range of financial domains. Below, we outline key provisions and time-sensitive opportunities.

Overview: What the Law Changes

As highlighted in BlackRock’s policy overview, the OBBBA is a wide-reaching reconciliation bill that:

• Makes permanent many individual and business tax cuts introduced under the 2017 Tax Cuts and Jobs Act (TCJA)
• Raises the federal gift and estate tax exemption
• Expands deductions for qualified business income and commercial real estate investments
• Reverses or sunsets many clean energy credits by the end of 2025
• Overhauls federal student loan repayment plans and income-driven repayment eligibility

For individuals, this means new opportunities for wealth transfer, education planning, and long-term tax efficiency. For business owners and investors, it reshapes timing and structure decisions across liquidity events, asset acquisitions, and hiring.

Key Categories to Understand—and Act On

1. Federal Estate & Gift Tax Exemption Increased

Starting January 1, 2026, the federal estate, gift, and generation-skipping transfer (GST) tax exemptions increase from $13.99 million to $15 million per individual, or $30 million per married couple. These exemptions are indexed for inflation and, unlike prior law, are not scheduled to automatically sunset.

Why it matters: High-net-worth individuals have a renewed opportunity to transfer assets with greater tax efficiency. Those who have already used much of their exemption will gain an additional $1 million starting in 2026. Delaying action may carry risk—future administrations may roll back these benefits.

2. Qualified Small Business Stock (QSBS) Expansion

The OBBBA introduces major enhancements to IRC §1202 for Qualified Small Business Stock:

• Holding period thresholds reduced:
  • 3–4 years: 50% gain exclusion
  • 4–5 years: 75% gain exclusion
  • 5+ years: 100% exclusion
• Exclusion cap raised: Greater of $15 million or 10x basis (up from $10 million)
• Eligible business size expanded: Up to $75 million in gross assets (up from $50 million)

Why it matters: 

This is a meaningful incentive for founders, early-stage investors, and high-growth C-corp shareholders to reassess entity structure and liquidity planning.

3. Tax Loss Harvesting and Portfolio Strategy

In addition to maintaining TCJA provisions for capital gains, the OBBBA offers a degree of stability around income thresholds and asset tax treatment, allowing investors to strategically plan for capital gains and losses in 2025.

Why it matters:

With potential volatility ahead, now is an ideal time to review unrealized losses, reposition portfolios, and ensure tax efficiency through customized harvesting strategies before December 31, 2025.

4. Commercial Real Estate: Bonus Depreciation & Cost Segregation

The OBBBA restores 100% bonus depreciation for assets placed in service after January 19, 2025. Combined with cost segregation studies, property owners can now accelerate deductions for qualifying building components (5-, 7-, or 15-year property) in the first year.

Other notable CRE provisions:

• Opportunity Zone incentives made permanent
• Section 179D remains available through June 30, 2026 (up to $5.81/sq ft deduction)
• QBI Deduction increased to 23% – the window to act is open, but may not stay that way.

Why it matters:

For real estate investors, developers, and owners, this is a strategic window to pursue improvements, tenant upgrades, and new acquisitions that yield immediate tax benefits.

5. Student Loan Forgiveness & Repayment Reform

The OBBBA eliminates or phases out many federal income-driven repayment (IDR) options:

• ICR repealed by July 1, 2028
• SAVE, PAYE, and Parent PLUS IDR options sunset after July 1, 2026
• Grandfathering clause preserves existing plan access for borrowers who avoid new federal debt after July 2026
• Double consolidation loophole remains available through June 30, 2026

Why it matters:

Borrowers must act quickly to preserve IDR eligibility or forgiveness access. In particular, Parent PLUS borrowers may benefit from consolidation strategies that disappear after mid-2026.

6. Clean Energy Credits: Phaseouts and Final Opportunities

The OBBBA repeals or rolls back several clean energy tax incentives—affecting both homeowners and businesses:

• Residential clean energy credits (for solar panels, geothermal systems, battery storage, etc.) will sunset by December 31, 2025
• Section 179D remains available through June 30, 2026, offering deductions for energy-efficient commercial buildings
• R&D tax credit amortization rules are reversed for 2025, allowing full expensing of domestic R&D efforts
• Most other green energy provisions from the Inflation Reduction Act are either capped, defunded, or repealed

Why it matters:

This is the last window to secure federal tax credits for energy-efficient upgrades. Homeowners and businesses alike should act in 2025 to lock in value before the incentives disappear.

What You Can Do Now

Tomoro and our affiliate network are prepared to help you act on these time-sensitive opportunities:

• Estate & GST Planning
  Use the expanded $15M exemption to update or extend your estate strategy. The window is open—but may not stay that way.
• Qualified Small Business Stock (QSBS)
  Recent changes create new opportunities for business owners and investors. Now is a good time to revisit your structure, eligibility, and exit timing.
• Tax Loss Harvesting
  With a more stable tax framework for 2025, there’s space to evaluate unrealized losses and rebalance portfolios with intention.
• Commercial Real Estate Deductions
  Bonus depreciation and cost segregation rules have shifted. If you’re considering acquisitions or upgrades, the incentives are worth reviewing.
• Student Loan Repayment Planning
  Several repayment and forgiveness options are being phased out. If you or someone in your household has federal student loans, early review may preserve flexibility.
• Clean Energy Credits
  Federal incentives for energy-efficient upgrades are being reduced or repealed. Whether for your home or business, 2025 may be the last chance to act on these.

Looking Ahead

Change brings complexity—but also possibility. With thoughtful planning, these shifts can become opportunities to realign your financial path with your long-term priorities.

If you’d like to explore how these changes may apply to your specific situation, your Tomoro advisor is here to help.

Let’s talk today.