The passage of the One Big Beautiful Bill Act (OBBBA) has significant implications for business owners and pre-liquidity planning, particularly regarding changes to qualified small business stock (QSBS), gift and estate taxes, charitable donations, and bonus depreciation.
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Extension and Enhancements to QSBS (Section 1202)
- The QSBS exclusion for taxable gains increased from $10 million to $15 million (with annual inflation indexing), and the gross asset threshold for qualification rose from $50 million to $75 million.
- The required holding period for the exclusion was reduced from five to three years, with a 50% exclusion after three years, 75% after four years, and 100% after five years.
- These changes make "stacking" (gifting QSBS to family members or trusts) more attractive, though state conformity and qualification rules add complexity.
- Founder-owners may benefit, especially by structuring future businesses as C Corporations to qualify for QSBS.
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Certainty Around Gift and Estate Taxes
- The federal lifetime estate and gift tax exemption was permanently increased to $15 million (indexed annually), eliminating the 2026 reduction from $13.99 million.
- This certainty allows business owners to plan without rushing, though GR ATs and SLATs remain viable estate-planning tools.
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New Wrinkles in Charitable Donations
- A 0.5% floor was introduced for itemized deductions for charitable contributions, limiting the deduction for high-income taxpayers.
- Charitable deductions for individuals in the top tax bracket are capped at 35% (down from 37% in 2026).
- These changes highlight the importance of synchronizing philanthropic vehicles with liquidity events.
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Changes to Bonus Depreciation and Section 179
- 100% bonus depreciation was restored for qualifying assets placed into service in 2025, with increased benefits and inclusion of used assets.
- Section 179 deduction caps were raised from $1 million to $2.5 million, with a phaseout threshold starting at $4 million and full phaseout at $6.5 million.
- Careful planning is needed to account for recapture when selling depreciated assets.
Conclusion
The OBBBA provides long-term certainty for business owners, but its complexities require careful pre-liquidity planning. Business owners should consult with wealth advisors to optimize tax strategies under the new rules.
