The One, Big, Beautiful Bill updates SALT, EBL, RQOF, but not LOL3K
What is LOL3K?
Four things that caught my eye in The One, Big, Beautiful Bill…
SALT:
The $10,000 state and local tax itemized deduction limit for married taxpayers filing jointly is set to expire Dec 31, 2025 (TCJA 2017)
OBBB increases it to $30,000, and phases it out progressively for MAGI > $400,000 down to the current $10,000 limit
The change would be permanent
Rural Qualified Opportunity Funds (RQOFs):
The Opportunity Zone program (TCJA 2017) is set to expire after December 31, 2026
Bill introduces a second round of Opportunity Zone designations that will be in effect from January 1, 2027, through December 31, 2033
Standard QOFs: Investments made after Dec 31, 2026, held ≥5 years, get a 10% basis step-up
Rural QOFs (RQOFs): Same timeline, but with a 30% basis step-up for rural investments
Limitation on Excess Business Losses
This matters for trader funds distributing business losses
The EBL cap, previously set to expire after 2028, would be permanent
Disallowed EBLs convert to Net Operating Losses (NOLs), subject to the 80% taxable income limit in future years
The $3,000 capital loss deduction against ordinary income is not included in OBBB. I’m calling this “LOL3K” or the “limit on losses of $3,000” until investors get an inflation adjustment.
This number hasn’t been updated since 1978 (Tax Reform Act of 1976).
Note the stalled Capital Loss Inflation Fairness Act, 2023, sponsored by Ralph Norman [R-SC-5], which proposes updating the limit to $13,000.
It’s not too late to write your congressperson and tell them to “stick up for the middle guy” by inflation-adjusting IRC §1211(b).