How the One Big Beautiful Bill Act could affect your taxes – and more

Despite a cascade of news covering the recent tax legislation commonly referred to as the One Big Beautiful Bill (OBBBA), signed into law this past July, “there has been a lot of information about it that’s misleading,” says Mitchell Drossman, head of National Wealth Strategies (NWS) in the Chief Investment Office of Merrill and Bank of America Private Bank. For one thing, “it doesn’t necessarily provide a tax cut to a wide range of wealthy people when comparing current tax rules to upcoming OBBBA changes.”

As a recent Tax Alert from NWS points out: “A high-income wage earner (earning $1 million or more) will likely see a modest tax increase” due to new limitations on charitable deductions and other itemized deductions. Meanwhile, owners of high-income businesses could benefit significantly from expanded pro-growth business changes such as accelerated depreciation deductions.

So, what do you need to know as you’re preparing for your 2025 taxes? Here are three factors to consider that aren’t receiving a great deal of play in the financial media.

Changes to the SALT deduction could add up to a “marriage penalty.”

Getting a lot of attention: the law increases the deduction for state and local taxes (SALT) from $10,000 to $40,000 annually. However, that higher amount is the same for both single and joint filers—greatly reducing the potential benefit to taxpayers who marry and file together. What’s more, it begins to phase down at specified income levels starting at $500,000/year, eventually returning to the $10,000 cap for both individuals and couples. And you’re only potentially eligible for a SALT deduction if you itemize on your tax return, which few taxpayers do.

There’s good news for your legacy planning.

Many people were planning to front-load their gifting to the next generation in anticipation of the potential expiration, at the end of 2025, of the historically high gift, estate and generation-skipping tax exemptions established by the 2017 Tax Cuts and Jobs Act. No need to worry about beating that deadline now – the new legislation locks in the exemptions permanently. For 2026, the federal estate tax exemption is $15 million per individual ($30 million for couples), significantly more than the estimated $7.2 million (adjusted for inflation) it would have been without OBBB changes.

You’ll be hearing more about non-grantor trusts – but they’re not for everyone.

These trusts are getting a ton of attention in the legal community in the wake of the OBBB’s passage. The quick distinction between a grantor and non-grantor trust: in the former, the trust’s creator is taxed on the trust’s income whether or not the trust makes a distribution. With a non-grantor trust, the trust itself is treated as a separate taxpayer for federal income tax purposes. The OBBB changes to rules around SALT deductions, charitable contributions and qualified business income are making non-grantor trusts look a lot more attractive from an income tax perspective in certain instances.

But unless you’re planning to put a significant amount into the trust, and willing to handle the upfront cost of creating it and its ongoing expenses, there may be more hype than substance to these trusts – especially because the increased SALT deduction cap is set to expire after 2029.

To determine how to make the most of these and other provisions within the OBBB, reach out to your advisor. 

What’s in the next generation’s portfolio (and should it be in yours)? 

Younger investors are bringing a quietly revolutionary approach to the business of building wealth — and their ideas are reshaping the investing landscape. Gen Z and Millennials aren’t just tweaking the traditional 60/40 portfolio. They’re questioning its relevance altogether.

According to a Bank of America study, only 14% of investors aged 21 to 43 believe U.S. stocks offer strong growth potential. Among investors 44 and older, that number jumps to 41%.

Instead of leaning into public equities, younger investors are exploring:

• Real estate (still their top pick)
• Crypto and digital assets
• Private equity and credit
• Direct investments and startups

This isn’t just about chasing trends. It’s about seeking control, customization and new avenues for growth, notes Bank of America Private Bank’s Structured and Alternative Investments team. Younger investors’ skepticism about public markets has a lot to do with the economic disruptions they saw as they came of age: a Great Recession, market volatility, abrupt swings in the job markets, the uncertainties of the pandemic.

Younger adults are also digital natives, highly comfortable with a financial world where tech platforms and decentralized finance play a pivotal role. What’s more, many are skeptical that traditional markets have the wealth-building value they exhibited in previous generations. And those investors are acting accordingly.

Add to the changes in investor behavior the fact that the market itself is evolving. Since 1996, the number of publicly traded companies has dropped from over 8,000 to about 4,500. Meanwhile, alternative investments — once reserved for the ultra-wealthy — are now more accessible across income levels and investor sophistication.

Why does it matter?

By 2048, $124 trillion in assets will change generational hands. It’s more than just a wealth transfer — it’s a mindset shift. And like all new approaches, it brings new opportunities – and introduces new potential risks:

• Private companies lack transparency. Without public oversight, due diligence becomes more of a challenge.
• Liquidity is limited. Private market investments can tie up capital.
• Risk tolerance varies. What seems visionary to one investor may feel speculative to another.
   

What you can do

If you’re wondering whether these new strategies belong in your portfolio, consider these points:

• Balance is key. Alternatives can complement — not replace — traditional investments.
• Your advisor is there to offer guidance. They can help you vet opportunities, assess risk and explore options you may not have considered.
• Stay informed. The market is evolving. See to it that your portfolio evolves with it.

Traveling for the holidays? Make sure a cybercriminal isn’t tagging along.

With the holiday season in full swing, airports, hotels and public spaces are about to get even busier, with leisure travelers joining the usual business crowd. Whether you're heading out to close a deal or spend time with loved ones, chances are you'll be navigating packed terminals and bustling lobbies. Amid the holiday hustle, cybercriminals see an opportunity — and travelers make especially appealing targets. This time of year is a hotspot for digital theft, and staying connected on the go can open the door to unwanted attention.

Not only are travelers at this time of year especially distracted, they’re also using public Wi-Fi, charging devices at communal stations and accessing their personal and business accounts. Given these risks, taking steps to protect yourself from scams, malware, data breaches and other forms of cyberfraud – and knowing what to do if you think you’ve been targeted – can help you stay secure while traveling.

Before you go: get tech-ready

• Limit your devices. Fewer gadgets mean fewer opportunities for loss or compromise.
• Update everything. Install the latest software and app updates to patch known vulnerabilities.
• Enable device tracking. Turn on “Find My Device” features so you can track, lock or remotely wipe your device if it goes missing.
• Back up your data. Store important files in the cloud or on an external drive before departure.
• Pack a personal power source. Bring a fully charged power bank or portable charger to avoid relying on public charging stations, which can pose security risks.

On the move: staying vigilant

• Avoid public USB charging stations. These can be compromised in a scam known as “juice jacking.” Use a power-only cable or your own power bank instead.
• Use a Virtual Private Network (VPN). It will encrypt your internet traffic, protecting your passwords and data, even on public Wi-Fi.
• Disable auto-connect. Turn off automatic Wi-Fi and Bluetooth features to avoid being pulled into rogue networks or unauthorized pairings.
• Think before you post. Sharing your location or travel plans in real time can alert criminals that your home is empty.
• Use strong authentication. Enable two-factor authentication and biometric locks on sensitive apps and accounts.

If you suspect a breach:

• Act fast. Time is critical. Change all passwords immediately and run antivirus software to detect malware.
• Notify your employer. If a work device or network may be affected, report it right away.
• Audit your apps. Look for unfamiliar downloads – if you find one, delete it immediately.
• Document the incident. Keep detailed notes to assist with investigations and future prevention.
• Update security software. Especially after international travel, refresh your antivirus and change passwords again.

A few smart precautions can help you enjoy holiday travel with confidence that your personal and financial information remains secure. For more tips, take a look at two Bank of America cybersecurity tip sheets: “Be cybersecure: travel safety” and “Be cybersecure: help protect against juice jacking.” 

Commercial real estate: Is it time to invest in the next cycle?

Why it’s coming back, and where growth is most likely

The commercial real estate market appears to be shaking off its extended malaise. “Commercial real estate (CRE) is cyclical, and there was a pretty strong correction starting in 2022. But that correction has run its course, and assets have largely re-priced for the next cycle,” says David Koletic, managing director of investments, specialty asset management (SAM) at Bank of America Private Bank. “Values are lower,  fundamentals are improving and CRE capital markets are opening,” he believes.

At the same time, the higher interest rate environment has contributed to higher cap rates and construction costs, muting the forward supply pipeline. This in turn has exposed a potentially favorable entry point for long-term investors, notes Koletic, who focuses on real estate investments for Bank of America’s wealth management clients.

Since late 2025, “the car has been turning the corner, even though the turn is a little wider and slower than anyone anticipated in January,” Koletic says – primarily because of the uncertainty surrounding interest rates and the impact that has had on transaction activity during April and May.

Why are conditions more favorable now? A few of the reasons:

• Capital markets are becoming more active. With equity capital available and debt markets open, transaction activity in commercial real estate is getting traction, albeit in a choppy manner during Q2, given the rise in 10-year US Treasury yields.
• Property market fundamentals are improving. “The supply/demand balance is in good shape, and improving,” Koletic notes. Across most property types, vacancies appear to have peaked or are close to peaking, while tenant demand is healthy.
• Limited new supply is supporting existing assets. With higher borrowing and construction costs discouraging new development, existing properties have a unique window in which they are facing less competition.
• Commercial real estate is gradually normalizing.  While sensitive to rate volatility and capital market conditions, the recovery in commercial real estate is beginning to take hold.

While deflating office values has gotten most of the headlines over the past few years, this slice of the investable commercial real estate market accounts for only about 12% of the whole.¹ Offices are is stabilizing, but progress will be slow as companies recalibrate space needs and reduce their footprints.

Of the remaining main subsectors, some are better positioned than others. Koletic believes secular tailwinds on the demand side favor warehouses. The supply picture favors necessity and strip retail, especially grocery-anchored, which can provide an attractive combination of current income with growth and pricing power for investors. He also sees multi-family housing -- including senior housing –  offering promising investment opportunities, especially in certain growth markets where new supply has already peaked.

Koletic emphasizes that this is not a “buy everything and hold market,” making careful underwriting and asset selection as important as ever.   

For more insights into commercial real estate going forward, read the SAM Insight Series, “Anticipating Opportunities in Real Assets,” by Bank of America’s SAM investment team.

¹ The Real Estate Roundtable 2025