On July 4, 2025, the President signed into law the One Big Beautiful Bill, introducing several tax changes that will directly impact landowners, farmers, and business owners beginning January 1, 2026.
Below is a summary of the most notable provisions landowners should be aware of.
Individual and Family Tax Changes
- Individual tax rates remain reduced, with the top marginal rate staying at 37% instead of increasing to 39.6%.
Existing brackets of 10%, 12%, 22%, and 24% remain in place. - Standard deduction increases to $15,000 for individuals and $30,000 for joint filers.
- Child tax credit increases to $2,200, with adjustments for inflation.
- Senior deduction adds an additional $6,000 for taxpayers over age 65.
- No tax on Social Security benefits.
- No tax on tips.
- No tax on overtime income, up to $12,500 for individuals and $25,000 for joint filers.
Business and Investment Provisions
- Pass-through business deduction remains at 20% of qualified business income, benefiting many farm and land-owning operations.
- Corporate tax rate remains at 21%, unchanged from the Tax Cuts and Jobs Act of 2017.
- 100% bonus depreciation continues, allowing for immediate expensing of qualifying assets.
- Loan interest deductions are available on U.S.-manufactured vehicles.
Estate and Capital Gains Impacts
- Estate tax exemption remains at $15,000,000, preventing the previously expected reduction.
- New temporary exemptions will be in place from 2025 through 2029.
- Capital gains tax rates decrease from 28% to 15%, significantly impacting land sales and investment decisions.
What This Means for Landowners
Overall, these changes are intended to keep more money in the hands of taxpayers, encouraging private-sector investment and increased economic activity. For landowners considering a sale, the reduction in capital gains taxes could meaningfully improve cash positions—especially for those who choose not to pursue a tax-deferred exchange.
While a step-up in basis at ownership transfer remains an important consideration, the lower capital gains rate may reduce concern in some scenarios.
As with any major tax legislation, the long-term effects—both positive and negative—remain to be seen. Because every landowner’s situation is unique, it is always wise to consult with a qualified accountant or tax professional before making decisions related to land sales or estate planning.
Feel free to contact us at AcrePro to assist you in making decisions regarding your long term plan(s).
