Key Takeaways | Family Office Tax Webinar Series | The One Big Beautiful Bill Act: What Family Offices Need to Know

On July 4, 2025, the One Big Beautiful Bill Act (OBBBA) was signed into law, marking the most sweeping US tax legislation since the 2017 Tax Cuts and Jobs Act (TCJA). In this webinar, McDermott’s Private Client and Tax teams examined how the new law affects wealth planning, investment structuring, charitable giving, and international strategy for family offices and high-net-worth clients.

1. Clarity, Continuity, and Planning Confidence. The legislation focuses on predictability by permanently extending individual income tax rates (including the 37% top rate for individuals, estates and, nongrantor trusts), preserving the 21% federal corporate rate, and making permanent several TCJA provisions. This continuity allows family offices to plan with greater confidence, particularly around pass-through and C-corporation structures, long-term investments, and estate planning—without the disruption of pending sunsets.
2. Transfer Tax Exemption Increased and Made Permanent. The estate, gift, and Generation-Skipping Transfer (GST) tax exemption amounts rise to $15 million per individual (indexed beginning in 2026), or $30 million for married couples, eliminating the urgency of pre-sunset gifting. Advisors can continue to focus on more flexible and tax-efficient lifetime transfers using Grantor Retained Annuity Trusts (GRATs), Spousal Lifetime Access Trusts (SLATs), dynasty trusts, and other multigenerational vehicles—particularly for assets with strong appreciation potential like early-stage equity or Qualified Small Business Stock (QSBS).
3. QSBS Rules Enhanced for Founders and Early-Stage Investors. Investors now benefit from partial capital gain exclusions after three (50%) and four (75%) years, in addition to the existing 100% exclusion at five years. The per-issuer exclusion cap is increased to the greater of $15 million or 10x basis, and the asset test for qualifying companies rises to $75 million. These enhancements make QSBS far more attractive to founders, private equity, and venture investors—and offer significant stacking opportunities when combined with gifting strategies.
4. Opportunity Zones (OZs) Become Permanent—with Rural Incentives. The OBBBA makes the OZ program permanent with new 10–year zone designations. Investments held for five years qualify for a 10% gain exclusion, or 30% if made through a Rural Qualified Opportunity Fund. However, gains deferred under the original OZ regime remain taxable by the end of 2026. Family offices should prepare for this deadline and may consider loss harvesting, charitable remainder trusts, installment sales and other tools to manage 2025 realization events.
5. Excess Business Loss Limitation Made Permanent. The rule limiting business losses to roughly $626,000 per year for joint filers is now permanent. Any unused losses convert to net operating losses (NOLs), limited to 80% of future taxable income. This is particularly relevant to family offices invested in sports teams, trader funds, or business aviation structures. Active modeling and entity-level planning will be critical to optimize NOL usage and preserve cash flow.
6. Investment and Operating Structures Receive Targeted Relief. The bill permanently reinstates the earnings before interest, taxes, depreciation, and amortization (EBITDA)-based limit on interest deductions, a favorable change for leveraged investments and blocker structures. Bonus depreciation is restored at 100%, unlocking immediate deductions for qualifying capital expenditures—including in real estate, infrastructure, and aviation. Family offices should revisit acquisition and depreciation schedules in light of these provisions.
7. Charitable Giving Rules Modified. Starting in 2026, charitable deductions by individuals are only allowed to the extent they exceed 0.5% of adjusted gross income (AGI)—but the 60% AGI limit for cash contributions remains intact. A new above-the-line deduction for non-itemizers ($1,000/$2,000) encourages broader participation. Closely held C-corporations must meet a 1% taxable income threshold. These changes may affect giving timing and entity-level strategy.
8. International Tax Adjustments Require Close Monitoring. Key TCJA international provisions remain in place, but with higher effective tax rates for Global Intangible Low-Taxed Income (GILTI) and Foreign-Derived Intangible Income (FDII) (approx. 14%) and the removal of the Qualified Business Asset Investment (QBAI) exemption. The Base Erosion and Anti-Abuse Tax (BEAT) increases to 10.5%. Creditability and foreign tax credit (FTC) rules have become more favorable, but global family offices should revisit international holding company structures and plan proactively for 2026 and beyond.
9. Important Exclusions: What Was Left Out. The final law leaves untouched several core strategies: the carried interest regime, private placement life insurance (PPLI), private placement variable annuities (PPVA), amortization deductions generated from acquisitions of professional sports franchises, and taxes on net investment income of private foundations remain unchanged. The controversial proposed Section 899 surtax on payments to residents of non-US jurisdictions was excluded—providing near-term relief to cross-border investors, but longer-term questions remain as global Pillar 2 regimes take effect.
10. Market Implications and Planning Trends. Passage of the law coincided with volatility in Treasury yields and the steepest first-half drop in the US dollar in over 50 years. As clients reassess their currency exposure, global asset mix, and portfolio hedging strategies, the case for proactive geographic diversification grows stronger. Existing family office structures remain viable—and often advantageous—but careful re-evaluation is essential as the legislative dust settles.

Explore Our In-Depth Analysis

For a deeper dive into the legislation’s impact on wealth planning, investment structuring, and family office structuring, read our full-length article, One Big Beautiful Bill Act: Assessing the Impact on Single-Family Offices and Their Stakeholders. The piece provides comprehensive guidance on the new law’s technical provisions—from QSBS and Opportunity Zones to estate tax planning and international structuring—and outlines insights tailored to family offices and high-net-worth investors.

Access to the webinar replay is available upon request. Get in touch to learn more.

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