3 Tax Wins for Passive Investors in the Big Beautiful Bill

Ellie Perlman By Ellie Perlman
3 min read
Jul 14, 2025

Topics:

multifamily

Passive Investing

Passive Income

Trump

Tax Matters

There’s some welcomed news for passive investors with the recent passing of Trump’s “Big Beautiful Bill.” While not without controversy, the legislation delivers three lasting advantages for limited partners in multifamily partnerships. These provisions flow directly through to K-1 distributions and personal returns, enhancing after-tax cash flows without additional elections or partnership amendments.

  1. Permanent 2017 Brackets and Standard Deduction
     The seven individual income-tax brackets established by the 2017 Tax Cuts and Jobs Act (10%, 12%, 22%, 24%, 32%, 35% and 37%) were originally scheduled to expire after 2025. Under the new law, those rates remain fixed indefinitely. As a result, the 24% bracket (where most passive distributions land) and the top 37% rate will not revert to higher levels (28% and nearly 40%, respectively) in 2026. The standard deduction is likewise preserved at $15,750 for single filers and $31,500 for joint filers (with ongoing inflation adjustments). Together, these provisions ensure that taxable income from partnership distributions continues to benefit from the more favorable 2025 tax structure, translating into material annual savings.
  2. Expanded SALT Cap for High-Tax-State Filers
     State and local taxes, such as state income taxes and homeowner-association or property fees, have long been an itemized deduction on individual returns. Since 2017, that deduction was capped at $10,000 per return. The recent legislation raises the cap to $40,000 for taxpayers with adjusted gross income (AGI) under $500,000. For example, combined state income and personal-property taxes of $28,000 can now be fully deducted rather than limited to $10,000, resulting in incremental federal tax savings that can exceed $4,000 per year at a 24% marginal rate.
  3. Restoration of 100% Bonus Depreciation
     At the partnership level, the law reinstates, and makes permanent, 100% bonus depreciation capture for qualifying commercial-real-estate assets placed in service after January 19, 2025. Components such as HVAC systems, elevators, landscaping work and tenant-improvement allowances can be expensed immediately in the year of acquisition rather than depreciated over 15 to 39 years. The true benefit for passive investors is that these accelerated deductions create passive losses on the K-1, which can offset passive gains in other years or other partnerships, thereby reducing overall taxable income well beyond merely matching deduction timing to cash flow.

Overall Impact
  • Locked-in brackets and deduction preserve lower marginal tax rates and a higher standard deduction.
  • Expanded SALT cap allows full deduction of up to $40,000 in state and local taxes.
  • 100 % bonus depreciation delivers immediate, partnership-level deductions that generate passive losses to shelter other passive income.

This presents an excellent opportunity to coordinate with a tax advisor and design a tax-efficient investment strategy: minimizing taxable burdens, maximizing after-tax cash flows, and positioning investors to further scale their multifamily portfolios.

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About Ellie Perlman

Ellie Perlman is the founder and CEO of Blue Lake Capital, a woman owned multifamily real estate investment firm focused on partnering with family offices and accredited investors to build and preserve generational wealth. Since its founding in 2017, Blue Lake has successfully acquired and operated multifamily assets across high-growth U.S. markets, completing $1B+ in transactions.

At Blue Lake Capital, Ellie and her team work exclusively with family offices and accredited investors, offering carefully curated investment opportunities that emphasize long-term wealth creation, stability, and risk-adjusted returns. A defining aspect of Blue Lake’s investment strategy is its integration of advanced AI-driven analytics and data science into the entire lifecycle of acquisitions and asset management. By leveraging cutting-edge technology, the firm executes data-driven forecasting on market trends, asset performance, and tenant behavior, ensuring strategic decision-making and optimized returns.

In addition to leading Blue Lake Capital, Ellie is the original founder and host of "REady2Scale - Real Estate Investing" podcast, which provides insights into multifamily real estate, alternative investments, and finance.

Ellie began her career as a commercial real estate attorney, structuring and negotiating complex transactions for one of Israel’s leading development firms. She later transitioned into property management, overseeing over $100M in assets for Israel’s largest energy company.

Ellie holds a Master’s in Law from Bar-Ilan University in Israel and an MBA from MIT Sloan School of Management.

You can learn more about Blue Lake Capital and Ellie Perlman at www.bluelake-capital.com.  
*The content provided on this website, including all downloadable resources, is for informational purposes only and should not be interpreted as financial advice. Furthermore, this material does not constitute an offer to sell or a solicitation of an offer to buy any securities.  
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