New Trump Tax Plan: Finally, the much awaited tax bill is now out in draft form. This bill has been named “One Big, Beautiful Bill” and it is big news for all those who are involved in real estate, business or high income group. Although this draft is not final yet, some provisions have been added to it which can completely change future tax planning.
In this article, we will tell you what changes have been made in this bill, what benefits will real estate investors and other taxpayers get, and what steps you should take from now.
Where does this bill stand right now?
The bill has passed the Ways and Means Committee and is now moving towards the Budget Committee. If everything goes according to plan, it will be passed in the House of Representatives before Memorial Day. But negotiations are still going on on controversial issues like SALT Cap, which can slow down this process.
SALT Cap: Hot debate continues
The deduction limit for State and Local Tax (SALT) was limited to $10,000 in the Tax Cuts and Jobs Act of 2017. In the new bill, it has been increased to $30,000, but if your AGI (Adjusted Gross Income) is more than $400,000, then this benefit will gradually end.
Lawmakers in high-tax states (like California and New York) are pushing for a cap of $62,000. Consensus seems unlikely on this issue, and this could be the biggest sticking point.
Good news for real estate investors: 100% bonus depreciation returns
From 2025 to 2028, 100% bonus depreciation is coming back – but with a caveat. This benefit will only be available on properties purchased and used after January 19, 2025.
Properties purchased in 2024 will be excluded and the old phaseout rule will apply to them.
Section 179 Expansion – Double Benefit
Now under Section 179:
- Deduction limit increased from $1M to $2M
- Phaseout threshold increased from $2.5M to $4M
This will provide a big relief to short-term rentals, hotels, gas stations and other capital-intensive businesses.
Qualified Opportunity Zones get a makeover
Although the capital gains recognition date remains the same in 2026, a few new things have been added in this bill:
- New zones and investment opportunities
- 10% basis step-up after 5 years (30% in rural areas)
- $10,000 ordinary income deferral
Tax exemption on 10-year holding remains the same.
QBI Deduction increased to 23%
The deduction of Qualified Business Income (QBI) has been increased from 20% to 23%. The special thing is that the phaseout has been made easier for service-based businesses (such as accountants, lawyers, doctors, etc.).
If your income is less than $555,000, then you can get full benefit of this.
Full cost deduction for Industrial Facilities
There is a big news for factories and industrial properties — now their entire cost can be deducted in the first year itself.
If you hold the property for more than 10 years, depreciation recapture can also be avoided. This will give a big boost to investment in the manufacturing sector.
“No Tax On” Provision: Relief for Workers
This bill has added some temporary but good provisions for the working class (from 2025 to 2028):
- Additional standard deduction of $4,000 to Social Security recipients
- Tip income will not be taxed
- No tax on overtime for those earning less than $160,000
Trump tax cuts made permanent
The provisions of the 2017 tax reforms that were to expire in 2025 are now being made permanent:
- Top tax bracket of 37% now permanent
- Standard deduction will be doubled
- $2,000 tax credit and additional $500 bonus for children 2025–2028
Excess Business Loss (EBL) rules tightened
EBL limit now $620,000 (Married Filing Jointly) has been made permanent and the old path of NOL (Net Operating Loss) has been closed.
This limit will apply every year and will affect higher income groups using STR (Short-Term Rentals) and REPS (Real Estate Professional Status).
Relief in Auto Loan Interest
If you buy a car made in the U.S., then up to $10,000 of interest for it can now be deducted. This will be an above-the-line deduction, meaning you do not need to itemize.
Relief in interest limits for large investors
Real estate syndicates with gross receipts of more than $25 million will get relief on interest deduction. Now depreciation will not have to be added back in the calculation.
Carried Interest will remain
Despite many rumors, Carried Interest has not been touched in this bill. This means the 3-year holding rule remains the same – a relief for real estate promoters.
Win-Win for Real Estate Investors
- 100% Bonus Depreciation back
- Section 179 expansion
- Full deduction on Industrial Properties
- 10-year tax exemption in QoZs
- QBI Deduction increased to 23%
- Interest cap relief for large investors
What should you do now?
If this bill is passed, the demand for real estate tax experts will skyrocket. So it would be wise to connect with an experienced CPA team now, who:
- Understands REPS and STR loopholes
- Has defended IRS audits
- Knows the right use of Bonus Depreciation and Cost Segregation
Conclusion:
The “One Big, Beautiful Bill” is indeed going to bring a big change to the tax system. Investors, businessmen and working people—everyone can benefit from this, provided you start preparing for it now. In this era of change, one step taken in the right direction can help you save thousands and lakhs of rupees in tax.
FAQs On New Trump Tax Plan
Q. What is the “One Big, Beautiful Bill”?
A. It’s a proposed tax bill with major updates for investors, business owners, and high-income earners.
Q. Has the bill passed yet?
A. Not yet. It passed the Ways and Means Committee and is now with the Budget Committee.
Q. What’s happening with the SALT deduction cap?
A. The cap may increase from $10,000 to $30,000, but phases out after $400,000 AGI.
