Family offices and the One Big Beautiful Bill Act: Implications of tax changes
Executive summary
The One Big Beautiful Bill Act (OBBBA) introduces transformative tax provisions with significant implications for family offices. By enhancing tax efficiency, solidifying long-term planning tools, and increasing flexibility in structuring investments and transfers, the OBBBA enables more robust multigenerational wealth strategies.
Below are the key impacts across five critical domains:
- Investments in small businesses and startups
- Real estate investments
- Charitable contributions
- State and local tax planning
- Estate and wealth transfer planning
The One Big Beautiful Bill Act (OBBBA), signed into law on July 4, 2025, introduces a broad set of tax changes that touch many aspects of family office planning. From investment structuring and charitable giving to real estate, state and local taxes (SALT), and estate strategies, the OBBBA offers new opportunities to align tax posture with long-term goals.
Below, we examine how OBBBA tax changes could affect five key issues for family offices, and we suggest what steps family offices can take to maximize the corresponding tax strategies.
Investments in small businesses and startups
Family offices frequently invest in private businesses and startups, often through direct ownership or venture capital. The qualified small business stock (QSBS) exclusion has long been a powerful tool for mitigating capital gains tax on successful exits, and its strategic use can significantly enhance after-tax returns.
How the OBBBA addresses exclusions for QSBS
The OBBBA expands the gain exclusion rules for the sale of QSBS, mainly through the following three changes applicable to QSBS issued after July 4, 2025:
- Provides a tiered exclusion: Allows taxpayers a 50% exclusion for shares held more than three years, a 75% exclusion for shares held more than four years, and a 100% exclusion for shares held more than five years.
- Increases per-issuer limitation: Raises the per-issuer gain exclusion cap from $10 million to $15 million (indexed for inflation) while still leaving available the 10-times-basis limit if greater.
- Increases corporate-level gross asset threshold for qualification: Increases the gross asset threshold from $50 million to $75 million (also indexed for inflation).
What it means for family offices
These changes may significantly expand the pool of eligible investments. Family offices can now pursue more strategic entity structuring and estate planning to maximize exclusions across generations.
Additionally, the shortened holding period will make QSBS investments materially more attractive to many fellow family office sponsors, private equity sponsors, and other opportunistic investors. It provides greater flexibility to choose an exit when market conditions support higher valuations, while still allowing investors to benefit from the new tiered tax benefits and realize a higher return.
Actions for family offices to consider
- Evaluate the tax structure of your business operations when planning new acquisitions or expanding current ventures.
- Use taxable trusts to “stack” QSBS exclusions across family members by gift and transfer.
- Model scenarios comparing grantor vs. non-grantor trust structures.
- Coordinate with entity choice and estate planning specialists to ensure compliance and optimize benefits.
- Plan for scenarios in which you sell different blocks over multiple years.
- Increase the gain exclusion amount by reinvesting QSBS sales proceeds in replacement QSBS under section 1045—when the applicable caps are exceeded and a suitable replacement can be found.
- Expand and seek out firms and managers that effectively leverage the new QSBS rules in attracting family office limited partners to invest in their funds.
Real estate investments
Family offices often seek long-term, tax-efficient investment strategies that align with generational wealth planning. Opportunity zones have historically offered a compelling vehicle for capital gains deferral and community impact, making them a natural fit for family offices with patient capital and a focus on legacy. Additionally, enhanced deductions have elevated long-term real estate investment strategies.
How the OBBBA addresses real estate investments
The OBBBA creates a more predictable and flexible tax environment for real estate investments. By making permanent key provisions—such as bonus depreciation, qualified business income deductions, and opportunity zone (OZ) incentives—it enables long-term planning and enhances after-tax returns.
Learn more about the OBBBA implications for real estate developers and investors.
What it means for family offices
Family offices can now structure deals with greater confidence, optimize timing for acquisitions, and pursue high-impact projects in underserved areas with durable tax advantages.
The permanence of qualified opportunity zone (QOZ) benefits allows family offices to integrate OZ investments into long-term tax and investment strategies. With expanded focus on rural zones, new avenues for manufacturing and warehousing investments are emerging—beyond the traditional urban real estate plays. The core OZ benefit—tax-free growth for investments held 10 years or more—remains in effect.
With 100% bonus depreciation restored, family offices can immediately deduct the full cost of eligible real estate improvements (e.g., HVAC, interior upgrades) for nonresidential buildings in the year those improvements are placed in service. This creates a meaningful opportunity to reduce taxable income and enhance ROI through their real estate investment vehicles.
Additionally, the return to an EBITDA-based interest expense limitation allows family offices to deduct more interest on leveraged real estate—an especially valuable benefit when rates are elevated.
Actions for family offices to consider
- Evaluate existing QOZ investments for potential 2026 income events and proactively plan mitigation strategies.
- Collaborate with investment advisors to implement wash sale or long-short strategies to generate offsetting losses.
- Evaluate leverage and interest deductibility in real estate investments to determine where additional debt may be advisable.
- Perform cost segregation studies for property placed in service after Jan. 19, 2025.
Charitable contributions
Philanthropy is a cornerstone of many family offices, reflecting values-driven wealth stewardship and community engagement. Structuring charitable giving to maximize tax efficiency is a key objective, especially for families with complex asset portfolios and multigenerational goals.
How the OBBBA addresses charitable contributions
The OBBBA introduces a 0.5% adjusted gross income (AGI) floor for charitable deductions and makes the 60% AGI limit permanent. It also fixes the ordering rules, permitting donors to deduct up to 60% of AGI even with combined gifts of cash and property. The new legislation caps the tax benefits of itemized charitable deductions at 35%, even for those in the 37% marginal tax bracket.
What it means for family offices
Philanthropically inclined family offices may face reduced deductibility due to the AGI floor. However, the permanence of the 60% limit and improved treatment of noncash gifts offer expanded planning flexibility.
Actions for family offices to consider
- Accelerate charitable giving to 2025, without generating a carryover, to avoid the newly implemented deduction limitations in 2026.
- Strategically exceed the AGI limit, allowing a carryover of the disallowed floor to be used in future years.
- Consider “bunching” contributions in certain years after 2025 to minimize the impact of 0.5% floor.
- Make contributions in low-income years to decrease the 0.5% limitation.
- Reassess charitable buckets (e.g., cash, noncash, private foundations) to optimize deductions.
- Explore reclassifying contributions as marketing or advertising expenses where applicable.
State and local tax (SALT) planning
Managing state and local tax exposure is a perennial concern for family offices, especially those with multistate operations or high-income individuals. SALT planning often intersects with entity structuring, residency decisions, and pass-through entity tax (PTET) elections.
How the OBBBA addresses key SALT provisions
The SALT deduction cap increases to $40,000 from $10,000, but the increase phases out completely at $600,000 AGI for married couples. Most high net worth families will see little change.
Learn more about how the OBBBA addresses SALT and PTET provisions and what it means for taxpayers.
What it means for family offices
Despite the higher cap, the phaseout threshold renders the benefit moot for most family office taxpayers. PTET elections remain a critical avenue to preserve deductibility.
Actions for family offices to consider
- Continue leveraging PTET elections in light of SALT limitations.
- Monitor state-level changes and coordinate with SALT specialists for compliance and optimization.
Estate and wealth transfer planning
Estate and gift tax planning is foundational to the mission of family offices, which are tasked with preserving wealth across generations while maintaining flexibility and control. Structuring transfers through trusts, leveraging exemptions, and timing gifts strategically are all essential components of a family office’s long-term legacy planning.
How the OBBBA addresses the estate and gift tax lifetime exemption
The OBBBA permanently increases the estate, gift, and generation-skipping transfer (GST) tax exemption to $15 million per individual, starting in 2026. This replaces the temporary $10 million exemption introduced under the Tax Cuts and Jobs Act, which had been adjusted for inflation to $13.99 million in 2025.
What it means for family offices
This expanded exemption provides family offices with a powerful tool to transfer significant wealth without triggering transfer taxes. The permanency of the provision allows for more predictable and strategic planning, especially for families considering multi-generational transfers, business succession, or philanthropic legacy structures.
Actions for family offices to consider
- Use the increased exemption to transfer appreciating assets before further inflation adjustments.
- Evaluate whether existing grantor or non-grantor trusts are optimized to take full advantage of the new exemption.
- Combine gifting strategies with QSBS exclusions to maximize tax efficiency.
- Work with estate planning specialists to simulate outcomes under various trust and gifting configurations, ensuring alignment with family governance and legacy goals.
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