THE ONE BIG BEAUTIFUL BILL ACT: HOW NEW FEDERAL TAX LAWS IMPACT BUSINESSES & INVESTORS
News
The One Big Beautiful Bill Act (OBBA), enacted on July 4, 2025, implements substantial reforms to federal tax laws that affect businesses and investors. Below is a summary of the most significant changes related to bonus depreciation, qualified small business stock, qualified opportunity funds and qualified business income deductions:
Bonus Depreciation
The OBBA permanently restores 100% bonus depreciation for qualified property placed in service after January 19, 2025. 100% bonus depreciation is also now available for qualified production property (including a portion of nonresidential real property used in certain manufacturing, agricultural or chemical production).
Qualified Small Business Stock
The gain on the sale of qualified small business stock can be partly or entirely excluded from federal income taxation. Under the OBBA, the gross asset limitation for qualifying businesses is increased to $75 million; the gain exclusion is now 50% for stock held for three years, 75% for stock held for four years and 100% for stock held for five years or longer; and the exclusion limitation is now increased to the greater of $15 million or ten times the stock basis.
Qualified Opportunity Funds
The investment of capital gains in a qualified opportunity fund (that in turn invests in qualified opportunity zones) enables the investor to defer the federal income taxation of those gains. Under the OBBA, such taxation is deferred for five years after the investment in the qualified opportunity fund, unless the investment is sold before five years. The OBBA also expands eligible qualified opportunity zones to include rural businesses and properties.
Qualified Business Income Deduction
Federal tax law provides a 20% deduction for certain income of partnerships, limited liability companies and S corporations. This deduction was set to expire at the end of 2025, but the OBBA makes it permanent.
For more information, please contact Robert L. Teicher (rteicher@brodywilk.com) or another BW Business & Finance attorney. To learn how the OBBA impacts estate planning, read our companion article on this topic here [insert link].
