When the Trump Administration’s “Big, Beautiful Bill” was signed into law, it created major advantages for small businesses and real estate investors. From increased deductions to immediate expensing, the tax landscape shifted in ways that allowed investors and business owners to reinvest more quickly and grow more confidently.
One of the most notable benefits was the increase in the small business tax deduction, which rose from 20% to 23%. This change meant business owners could retain more of their profits, providing additional capital to reinvest in growth, expand operations, or strengthen financial reserves.
Another powerful provision was the return of 100% immediate expensing. Instead of spreading deductions for qualifying purchases over several years, businesses could now deduct those costs all at once. For companies who needed to invest in equipment, vehicles, or technology, this accelerated deduction created a strong incentive to upgrade and modernize without waiting for long-term tax benefits.
Real estate investors can experience a significant advantage with accelerated depreciation. With 100% bonus depreciation, they were able to write off property-related expenses much faster, making real estate an even more compelling wealth building strategy. Whether held inside a business or a direct investment, the ability to capture depreciation quickly meant investors could reduce taxable income and keep more money working for them.
Together, these changes were designed to help business owners and investors grow with more financial flexibility. But while the “Big, Beautiful Bill” provided many advantages during ownership, it didn’t solve another problem, the capital gains tax bill that arrives after the sale.
The Other Not So Big Beautiful Bill — Capital Gains Taxes
While the tax law improved deductions and expensing while you own a business or property, many investors face another major bill when they decide to sell, capital gains taxes.
Imagine you purchase equipment for your company or invest in property and take full advantage of immediate expensing and bonus depreciation. But if you choose to sell just a few years later, you could suddenly be hit with a massive capital gains tax bill that undermines those earlier benefits.
This is where proactive planning becomes essential.
Enter the Deferred Sales Trust (DST)
The Deferred Sales Trust is designed to handle the capital gains tax bill. Instead of paying capital gains taxes in one lump sum when you sell a business, property, or other highly appreciated asset, the DST allows you to defer those taxes under IRC 453 (the installment sale method).
With a DST, you gain the ability to spread out your tax liability over time rather than paying everything upfront. Instead of writing one massive check to the IRS the year of your sale, your payments and the taxes associated with them are distributed according to a schedule that aligns with your financial needs.
Another key advantage is flexibility. Whether you choose to sell in year two or year twenty, the DST can be tailored to your timing, your lifestyle, and your wealth-building goals. This makes it a versatile option for both near-term exits and long-term planning.
Most importantly, the DST allows more of your money to remain invested instead of being drained by immediate taxation. By keeping those funds at work, you create the opportunity for compounding growth helping you build a stronger nest egg before paying taxes later.
Putting It All Together
The “Big, Beautiful Bill” gave small businesses and real estate investors a range of tools to reduce taxable income and accelerate growth during ownership. But those benefits only address one side of the equation. The other side, the capital gains bill that comes with selling an appreciated asset, requires a strategy like the Deferred Sales Trust.
By combining the deduction and expensing advantages of the “Big, Beautiful Bill” with the capital gains deferral strategy offered by a DST, business owners and investors can create a comprehensive tax strategy that maximizes savings now and protects wealth in the future.
Frequently Asked Questions:
Why is EBITDA important when planning to sell a business?
Earnings Before Interest, Taxes, Depreciation, and Amortization is one of the key measures buyers use to value a business. By using deductions and depreciation during ownership, you can reduce taxes while also strengthening EBITDA, which can lead to a higher sale price when you’re ready to exit.
How does a Deferred Sales Trust (DST) work?
A Deferred Sales Trust allows business owners and investors to defer capital gains taxes when selling highly appreciated assets. Instead of paying taxes immediately at the time of sale, proceeds are placed into a trust in exchange for an installment note. This spreads out the tax liability, keeps more money invested, and provides flexible income over time.
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