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IWTA’s Guide to Key Provisions of the One Big Beautiful Bill Act

IWTA’s Guide to Key Provisions of the One Big Beautiful Bill Act

by | Sep 29, 2025 | Taxes, 2025, Compliance, Finance, International, International tax, Investments, U.S.

IWTA’s Guide to Key Provisions of the One Big Beautiful Bill Act

Jack Brister s p 500

Jack Brister

Founder, International Wealth Tax Advisors

Jack Brister, Founder of International Wealth Tax Advisors, is a noted international tax expert, with over 25 years of experience. Jack specializes in U.S. tax planning and compliance for non-U.S. families with international wealth and asset protection structures.

Jack is a frequent featured speaker at numerous international financial conferences and has been named a Citywealth Top 100 U.S. Wealth Advisor.

Contact IWTA

To schedule an introductory phone conference with IWTA  founder Jack Brister simply click here. Email IWTA at bloginquiries@iwtas.com Or call the IWTA New York City office at 212-256-1142

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IWTA’s Guide to Key Provisions of the One Big Beautiful Bill Act

Signed into law in early July, the One, Big Beautiful Bill Act (OBBBA) introduces significant changes to tax law— impacting high-net-worth individuals (HNWIs). From new rules on global income tax (GILTI) to expanded opportunities for Qualified Small Business Stock (QSBS) investments, and much more, understanding and planning for these changes is essential.

Global Tax Burdens Require Careful Planning

  • Higher GILTI Tax Rate:The deduction for Global Intangible Low-Taxed Income (GILTI) drops from 50% to 40%, raising the effective U.S. tax rate from approximately 10.5% to about 14%. Offshore profits not fully offset by foreign tax credits now face higher residual U.S. tax, reducing the appeal of low-tax jurisdiction planning.
  • Expanded Foreign Tax Credit: The allowable Foreign Tax Credit rises to 90% of deemed paid foreign taxes. While helpful, the built-in “haircut” ensures that some U.S. tax liability remains, requiring careful credit modeling to avoid trapped credits.
  • Elimination of QBAI Benefit: The Qualified Business Asset Investment provides an exemption for income generated by tangible assets abroad, distinguishing it from highly mobile intangible income. With the prior 10% deemed return exclusion on tangible foreign assets removed, this change will especially impact capital-intensive offshore operations—manufacturing, infrastructure, real estate—where more earnings are now swept into GILTI.
  • New Name and Lower Benefit for FDII: The Foreign-Derived Intangible Income regime is now known as Foreign-Derived Deduction Eligible Income,(FDDI) and its benefit reduced to a 33.34% deduction. For U.S. corporations generating export-related income, the preferential effective rate shrinks, making the U.S. a less favorable hub for export-driven strategies.

Newly-Expanded Qualified Small Business Stock Benefits Demand Strategic Exit Strategies

  • Increased Exclusion Limit: The exclusion cap for Qualified Small Business Stock (QSBS) investments rises by 50 percent—from $10 million to $15 million per shareholder—adjusted for inflation beginning in 2027. Investors can now exclude the greater of $15 million or 10 times their basis in the QSBS.
  • Shorter Holding Periods for Partial Exclusions: The OBBBA introduces partial exclusions for gains realized after three or four years, rather than the previous five-year minimum. For example:
    • 3-year holding period: 50% exclusion
    • 4-year holding period: 75% exclusion
    • 5+ years: 100% exclusion
  • This flexibility allows investors to capitalize on liquidity opportunities without waiting the full five years, while still benefiting from meaningful tax relief. Partial exclusions are subject to the top 28% capital gains rate and the 3.8% Net Investment Income Tax (NIIT) on the non-excluded portion. Advisors should consider strategic timing for QSBS sales and potential reinvestment in new QSBS within 60 days to defer taxable gain.
  • Expanded Corporate Eligibility: The Bill raises the gross asset threshold for QSBS-issuing corporations from $50 million to $75 million, indexed for inflation. Combined with provisions for immediate expensing of research and experimental expenditures, these changes allow larger, later-stage startups to qualify as “small businesses,” increasing the universe of investment opportunities for HNWI portfolios.

Permanent Interest Caps Necessitate Careful Real Estate Financing Strategies

  • The OBBBA makes permanent the cap on mortgage interest deductions set by the TCJA. Homeowners can only deduct interest on up to $750,000 of home loans ($375,000 if married filing separately), and this limit applies to mortgages used to buy or improve a main home or one additional home, like a vacation property.
  • Home equity loan interest can only be deducted if the funds are used to improve or buy a primary or second home. Even then, the total mortgage plus home equity debt that qualifies is still capped at $750,000/$375,000.
  • The OBBBA temporarily raises the SALT deduction cap from $10,000 to $40,000 ($20,000 if married filing separately). This higher limit applies from 2025 to 2029, with small yearly increases starting in 2026. In 2030, the deduction cap returns to $10,000 unless new laws extend the expansion.

Holistic Tax Planning to Drive Better Outcomes for High-Net-Worth Clients

The OBBBA highlights the need for careful tax planning for high-net-worth clients. Those in high-tax states should act now to benefit from expanded SALT deductions before limits revert, while clients with multiple properties or large mortgages need help optimizing their home mortgage and equity loan deductions. Internationally, higher GILTI rates and reduced tax incentives require close review of cross-border structures. Meanwhile, enhanced benefits for qualified small business investments create new opportunities to grow wealth through private equity.

By leveraging these permanent and enhanced provisions, advisors can help clients preserve, grow, and strategically deploy wealth in a tax-efficient manner. Jack Brister and his capable team know U.S. and international tax statutes inside and out. We’re here for a consultation, an evaluation, and to serve as a trusted advisor and accounting partner. Whether you call Detroit, Dublin or Dubai your home, if you have investments, business, family or residences in the U.S., we can help.

The New Wealth Class Is Betting on Alternatives — And Triggering a Tax Crunch

The New Wealth Class Is Betting on Alternatives — And Triggering a Tax Crunch

by | Jul 17, 2025 | Taxes, 2025, Compliance, Finance, International, International tax, Investments, U.S.

The New Wealth Class Is Betting on Alternatives — And Triggering a Tax Crunch

Jack Brister s p 500

Jack Brister

Founder, International Wealth Tax Advisors

Jack Brister, Founder of International Wealth Tax Advisors, is a noted international tax expert, with over 25 years of experience. Jack specializes in U.S. tax planning and compliance for non-U.S. families with international wealth and asset protection structures.

Jack is a frequent featured speaker at numerous international financial conferences and has been named a Citywealth Top 100 U.S. Wealth Advisor.

Contact IWTA

To schedule an introductory phone conference with IWTA  founder Jack Brister simply click here. Email IWTA at bloginquiries@iwtas.com Or call the IWTA New York City office at 212-256-1142

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Find Previous Posts

The New Wealth Class Is Betting on Alternatives—And Triggering a Tax Crunch

Younger, affluent investors are increasingly turning to alternative investments, such as private equity, venture funds, real estate syndications, and even collectibles. In their quest for diversification and outsized returns, they may overlook the complex tax consequences that arise from these investments, including K-1 and pass-through income, which can lead to tax and estate planning headaches. The Wealth Transfer Is Here: Young Affluent Investors Are Gaining Ground A massive generational wealth transfer is underway, with $84 trillion projected to move to Millennials and Gen Z by 2045. And while Boomers currently control approximately 52% of US wealth, Millennials stand to inherit the most money of any generation over the next 25 years. And this generation invests differently than their parents or grandparents. Growing up in a landscape shaped by the 2008 financial crisis, rapid tech innovation, and low trust in traditional institutions, younger investors are more comfortable with higher risk, less liquidity, and digital-first platforms. While older generations built wealth through steady exposure to public markets, homeownership, and retirement accounts, millennials are drawn to private equity, venture capital, crypto, and alternative assets not just for diversification and potentially higher returns, but also because these investments align with their values—like backing innovation, sustainability, or emerging technologies.  The Hidden Cost: Alternative Investments Come With Tax Headaches As this generation looks beyond the traditional stock and bond markets to build their wealth, what are the tax consequences for younger investors, and are they prepared?   Young HNWI are drawn to alternative assets for growth and diversification—but often lack integrated tax planning infrastructure. Without proactive tax and legal guidance, they risk missed savings, surprise liabilities, and execution roadblocks. Private Equity and Real Estate May Involve K‑1 Complexity and Pass‑Through Income When investors participate in private equity, real estate syndications, or other partnerships, they receive a Schedule K‑1, which reports their share of income, deductions, and credits. K‑1s often arrive late—after April 15—forcing investors to file extensions, estimate taxes, or risk penalties and interest. Additionally, income reported on K‑1s may come from multiple states, triggering multi-state tax filings even for passive investors. Crucially, pass-through income can be taxed at ordinary income rates, not the more favorable capital gains rates, reducing after-tax returns. Alternative Investments and Unrelated Business Taxable Income   Alternative investments held inside self-directed IRAs (SDIRAs) may generate Unrelated Business Taxable Income (UBTI)—particularly when the IRA uses debt-financing or operates a business within the investment. For example, if a leveraged real estate syndicate is inside an IRA, the debt-financed portion of income becomes UBTI and is taxable within the IRA. Once the IRA’s UBTI exceeds $1,000, the custodian must file Form 990‑T, and taxes are paid from IRA assets—eroding returns and complicating tax planning.   Estate Planning and Valuation Challenges Alternative assets such as private equity, real estate syndications, and collectibles are illiquid and hard to value, complicating estate planning and gifting. Accurate appraisals are needed for tax purposes, and aggressive valuation discounts may draw IRS scrutiny. Many tax-advantaged strategies—like Grantor Retained Annuity Trusts (GRATs) or Intentionally Defective Grantor Trusts (IDGTs)—become harder to deploy effectively without careful structure and valuation support. Phantom Income and Capital Gains Timing Private investments often generate imputed or phantom income—taxable income without actual cash distributions—potentially triggering estimated tax obligations and cash-flow mismatch. Conversely, realizing capital gains may be delayed by an asset’s illiquidity, leading to timing issues for tax liabilities and missed opportunities to harvest losses. Furthermore, passive activity loss rules may restrict the use of reported losses, limiting offset potential. Multi-State and International Reporting Burdens Investments that include assets or activities in multiple U.S. jurisdictions may create state filing requirements across several states due to nexus—necessitating multiple tax returns and compliance efforts. Moreover, non-U.S. investors must navigate additional complexities, such as Foreign Investment in Real Property Tax Act (FIRPTA) withholding, effectively connected income (ECI) filings, estate tax exposure, and withholding treaties. See our article about the 16th Amendment and Moore vs the United States. Without proactive tax and legal guidance, these younger investors risk missed savings, surprise liabilities, and execution roadblocks. Jack Brister and his capable team know U.S. and international tax statutes inside and out. We’re here for a consultation, an evaluation, and to serve as a trusted advisor and accounting partner. Whether you call Detroit, Dublin or Dubai your home, if you have investments, business, family or residences in the U.S., we can help.