Family offices and the One Big Beautiful Bill Act: Implications of tax changes

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.

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.

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.

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.

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.