August 18th, 2025
David De Jong Shares Highlights of OBBBA in Bloomberg Tax Article
Posted in: Business Law Tax Law Tagged: David S. De Jong
Author: David S. De Jong
Stein Sperling Tax Law attorney David De Jong recently wrote an article for Bloomberg Tax entitled “GOP Tax Law Gives Entrepreneurs Incentive to Be C Corporations“
Here are some key highlights from the article:
Major Tax Incentives for Entrepreneurs
- New $3.4 trillion tax package creates powerful incentives for startup investment and business growth
Enhanced Section 1202 Benefits
- Graduated exclusions: 50% at 3 years, 75% at 4 years, 100% at 5 years (previously required full 5-year hold)
- Maximum exclusion increased from $10 million to $15 million lifetime
- Asset threshold raised from $50 million to $75 million
100% Bonus Depreciation Returns
- Immediate write-off for equipment, machinery, and commercial improvements
- Applies to property acquired after January 19, 2025
- Made “permanent” (indefinite) – predicted to boost GDP by 0.6% and create equivalent of 145,000 jobs
Strategic Business Structure Implications
- Changes may favor C corporations over S corps or LLCs for tax optimization
- Potential for “tax holiday” on business sale gains
Enhanced Section 179 Expensing
- Maximum deduction increased to $2.5 million (phasing out at $4 million in purchases)
- Covers certain improvements like commercial roofing that bonus depreciation may not
