The One Big Beautiful Bill (OBBB), passed in 2025, delivers major tax changes that are already reshaping how business owners approach succession, sale, and employee ownership. At PCE, we’re hearing a surge of questions from owners who want to know how these updates impact their personal and financial exit goals.
From expanded capital gains exclusions to new opportunities in estate tax planning, bonus depreciation, and pass-through deductions, this guide breaks down the 10 most important questions you should be asking now.
Whether you're exploring a business valuation, considering an exit strategy, or evaluating an ESOP, these insights will help you make informed, confident decisions in a changing landscape.
If you own a C corporation, you may now be eligible to exclude up to $15 million in capital gains—tax-free—when you sell stock.
To qualify, your business needs to meet these criteria:
The company must meet the gross assets test: At the time new stock is issued, the company’s total assets cannot exceed $50 million (for stock issued before July 4, 2025) or $75 million (for stock issued after that date).New under the OBBBA: For Qualified Small Business Stock (QSBS) acquired after July 4, 2025, a tiered system of exclusions applies:
If you’re not currently structured as a C Corp, there may still be time to restructure depending on your exit timeline. Some owners have used stock reissuance or recapitalization strategies to capture partial QSBS benefits.
Action: Ask your tax advisor or valuation expert to review your corporate structure, asset size, and timing. With QSBS, both the clock and company size matter.
That depends on your long-term plan.
Converting to a C Corp starts the QSBS holding clock. If you’re planning a sale further out, this could be a smart move. But if your exit is near-term, you won’t qualify in time—and you could lose important S Corp tax benefits.
| Pros of converting | Cons of converting |
| Access to up to $15M QSBS gain exclusion | Higher corporate tax rates |
| Better positioning for certain types of buyers | No pass-through income |
| More flexibility in equity-based estate planning | QSBS benefits are not retroactive |
Note on timing under OBBBA: You no longer need to hold a full five years to benefit. Partial exclusions kick in after three and four years, but the 100% exclusion requires five years.
Action: Map out your timeline. If you’re more than three years from a sale, conversion may be worth exploring now.
Yes. The OBBBA made the Section 199A pass-through deduction permanent, which is great news if you operate as an S corp or partnership.
You’ll continue to benefit from a 20% tax deduction on qualified business income, which can meaningfully improve cash flow—especially helpful if you’re planning a gradual transition or internal sale.
Special note on ESOPs:
⚠️ State-level note: Not all states conform to Section 199A, so the deduction may not apply at the state tax level.
Action: Confirm your eligibility annually and work with your advisor to maximize this benefit, especially if you’re balancing ownership changes or considering a partial ESOP.
Maybe—but timing matters.
For 2025, the federal gift and estate tax exemption is $13.99 million per person (or $27.98 million per couple). Starting in 2026, the OBBBA makes the exemption permanently $15 million per person (or $30 million per couple).
That means there isn’t the same “sunset rush” as before, but gifting strategies are still powerful—especially if you want to transfer your business to family or key stakeholders.
Why consider gifting now?
⚠️Note on employees: Gifts to employees are generally treated differently than gifts to family or trusts—they may be considered compensation and taxed as income.
Action: Work with your valuation advisor and estate attorney to design a plan that maximizes the current exemption and accounts for your long-term goals.
The most efficient plans combine valuation strategies with estate planning tools.
Consider these approaches:
By applying valuation discounts for lack of control or marketability, you can transfer ownership interests at a reduced taxable value, allowing you to move more wealth within your exemption. For example, a $10 million business interest might be valued at only $7 million for gift tax purposes, meaning you can pass along the same stake while using less of your exemption.
Current exemption levels:
Action: Start planning now. These structures take time to implement and work best when set up before a sale.
Yes—and it could significantly improve your cash flow.
The OBBBA reinstated 100% bonus depreciation, allowing you to fully deduct the cost of eligible business property in the year it’s placed in service. That includes:
Here’s how it plays out:
Action: Time purchases wisely. Work with your CPA and valuation expert to capture the cash flow benefit without creating unintended optics on your financials before a sale or ESOP.
Possibly—but not because of EBITDA. EBITDA ignores taxes, so tax changes are neutral to EBITDA and EBITDA margins. Where you may see a benefit is in free cash flow and perceived risk, which can influence how buyers price the deal.
What could move value (and what won’t):
Action: If you haven’t had a valuation in the last 12–18 months, get one. Ask for both market-multiple and DCF views, with scenario analysis reflecting tax timing and risk assumptions. This helps you plan, gift, or pursue a transition with confidence.
Takeaway: Tax changes won’t lift EBITDA, but they can improve free cash flow and reduce perceived risk—two levers that may support a better multiple and higher value, all else equal.
Yes—and it strengthens the case for considering one now.
While OBBB didn’t change ESOP law directly, it enhanced several factors that benefit ESOP transactions:
If you’re thinking about liquidity and legacy, an ESOP can offer both—with major tax advantages.
Action: Talk to an ESOP advisor now. It can take several months to design and implement the right structure.
It depends on your objectives.
If you want to:
… then you may want to accelerate.
But if you need more time to qualify for QSBS or finalize a succession structure, it could make sense to delay and plan more strategically.
Action: Run a side-by-side financial model comparing your options over the next 3–5 years.
Bring the right team to the table. A successful business transition requires alignment across multiple disciplines:
At PCE, we work alongside your legal and tax advisors and integrate valuation and transaction expertise—helping you see the full picture and compare your exit options, whether that’s selling to a third party, passing the business to family, or setting up an ESOP.
Action: Don’t wait until you’re ready to sell. Start building your strategy 1–3 years in advance to give every advisor time to maximize results.
Final Thought
The OBBB didn’t just change tax law. It changed the timing, tools, and trade-offs involved in exiting your business.
Whether you’re looking at a full sale, succession, or an ESOP, now is the time to ask:
“How can I make the most of this opportunity?”