Video Transcript Below
Introduction
00:00:00
Francisco Sirvent:
Well, good afternoon, everybody. For those of you who know me, you know I’m Francisco Sirvent with Keystone Law Firm. For those of you who don’t know me, welcome. I’m an estate and tax attorney here at Keystone Law Firm and also a financial adviser with Lifestyle Planning.
We have more content than we could hope to cover in a quick webinar. This “one big beautiful bill” is the topic of hundreds and thousands of hours of research to understand its impact on my industry. I had to pick and choose what I thought would be most helpful and relevant for you. So, we’re going to hit on what I think are the five biggest things that impact my practice and the people we take care of.
Before we dive in, I definitely want to welcome you all. We’ll be here about an hour, and I have a hard stop at 1:00.
00:05:13
Francisco Sirvent:
I’m going to save a little time at the end for questions. I am recording this, and we will share all of these webinars on our YouTube channel. So, that’s where you’ll be able to find a replay if you want to watch it again to understand things a bit better.
With that, just know it’s being recorded. If you prefer not to be on the recording, you can turn off your video or drop off entirely and just watch the recording. The fastest and easiest way for us to get these up and out to everybody is to use this system.
For those who don’t know, here are the legal notices we need to put out regarding everything shared: this is not specific legal, tax, or financial advice for anyone’s personal situation.
00:06:15
Francisco Sirvent:
This is general educational information. So, if you learn something here and think, “Oh wow, I need to do that,” double-check it with your advisor to make sure it fits your situation. I hope this raises some issues for you to think about and maybe prompts you to take action. The best thing about this is finding a nugget here or there that you can actually use to improve your situation.
Alright, let’s dive right in. The first one, which is probably the simplest and easiest to implement, is the bonus senior deduction. This applies to people who are 65 or older, and it’s available this year if you’re in that category.
00:07:20
Francisco Sirvent:
So, what does this mean? Back in 2017, the tax act introduced a whole bunch of benefits, including a significant increase in the standard deduction, which varies for single, married, and head-of-household filers. For most people, this made itemizing deductions irrelevant because the IRS just gives you a bigger standard deduction.
Single: $15,750
Head of household: ~$23,000
Married filing jointly: ~$31,000
These numbers are regardless of age. This standard deduction wipes out a lot of your taxable income without proving anything.
Since 2017, seniors 65 and older also received an extra $2,000 deduction. What’s new with this bill is a bonus $6,000 deduction for those 65 and older. That’s a big deal—if your effective tax rate is 20%, that’s $1,200 back in your pocket.
00:10:02
Francisco Sirvent:
Here’s how it shakes out:
Single, 65+: Standard + senior + bonus = $23,750
Head of household, 65+: Standard + bonus + senior = $31,625
Married, one spouse 65+: Standard + partial bonus + senior
Married, both 65+: Standard + two senior deductions = $46,700
Keep this in mind when filing taxes if you’re 65 or older.
00:11:15
Francisco Sirvent:
Next up: Trump Accounts—brand new. If you have a child or grandchild born in tax years 2025–2029, the federal government deposits $1,000 into an individual retirement account for them.
Parents manage the account initially.
No withdrawals before 18.
Family can contribute up to $5,000 per year.
Tax-deferred growth like an IRA.
At 18, it converts to a regular IRA. Normally, kids can’t start an IRA because they don’t earn income—but this bypasses that.
00:13:56
Francisco Sirvent:
If you leave the $1,000 untouched:
5% growth → ~$20,000 by age 60
8% growth → ~$115,000
If invested aggressively over decades, it could grow to multiple hundreds of thousands—free money for retirement. This is a smart step for parents and grandparents to secure a child’s future.
00:16:07
Francisco Sirvent:
Now, something a bit more complex but very significant: depreciation for businesses and investors.
Depreciation allows businesses to deduct purchases that last more than a year. Instead of spreading it over the item’s life, bonus depreciation allows you to deduct 100% in the year of purchase. This law is now permanent.
Example:
Business net income: $250,000
Bonus depreciation: $100,000
Taxable income reduces to $150,000 → saves ~$27,000 in federal taxes.
For high-income earners, creative strategies could allow hundreds of thousands in deductions, lowering effective tax rates significantly.
00:25:42
Francisco Sirvent:
There are legitimate ways to leverage bonus depreciation:
Solar tax credits: Invest in solar → tax credits + bonus depreciation.
Oil and gas working interests: High risk but huge tax benefits.
These strategies can significantly reduce tax bills while reinvesting in assets you own.
00:29:12
Francisco Sirvent:
Charitable giving also has an update. Previously, donations below your standard deduction weren’t deductible. Now:
Single: extra $1,000 deduction
Married: extra $2,000 deduction
If you itemize, there’s a small reduction based on 0.5% of your AGI, but it encourages charitable giving without itemizing.
00:33:12
Francisco Sirvent:
Finally, the estate and gift tax exemptions. Before this act, starting January 1, 2026, the exemption would drop:
Married couple: $12M ($6M per person)
Now, with the new law:
$15M per person ($30M married couple), indexed for inflation.
Exemption applies either at death or via lifetime gifts.
Example: A couple with $30M can gift $15M now, reducing the exemption remaining at death.
00:36:30
Francisco Sirvent:
So, the estate and gift tax exemption is basically a coupon. You can use it during your life by making gifts, or it applies when you die. The tricky part is planning around it strategically. Some clients may want to gift portions now to reduce their taxable estate later, while others may want to hold off, depending on their situation.
It’s important to remember that the exemption is indexed for inflation moving forward, so it grows each year slightly. That gives a lot of flexibility for long-term estate planning.
00:37:15
Francisco Sirvent:
Now, let’s talk briefly about step-up in basis because it ties into estate planning. If someone inherits assets, like stocks or real estate, the cost basis “steps up” to the value at the time of death. This can eliminate a lot of capital gains tax for heirs if the assets appreciated significantly.
But here’s the key: that only applies if you hold the asset until death. If you gift the asset during your lifetime, the heir inherits your original cost basis and may owe significant taxes on any appreciation. That’s why proper planning around gifts versus bequests is crucial.
00:38:30
Francisco Sirvent:
Another big change that’s often overlooked is the 529 college savings plans. Previously, you could contribute, and it grew tax-free if used for education. Now, you can also withdraw up to $10,000 per year for K-12 tuition without penalties.
This is huge for parents thinking about private school, homeschooling, or even tutoring programs. And of course, it still grows tax-free for college expenses. It’s another way the law incentivizes savings for families.
00:39:45
Francisco Sirvent:
I also want to mention Roth conversions. The bill didn’t change the rules here dramatically, but it makes sense to revisit your Roth strategy because of the bonus deductions and tax planning opportunities we discussed.
If you’re in a lower tax bracket due to these deductions or depreciation strategies, this could be a great year to convert traditional IRA or 401(k) funds to Roth accounts at a lower tax cost. Over the long term, that can save a lot of taxes, especially if you expect higher income later.
00:40:55
Francisco Sirvent:
And finally, something I think is really cool and often misunderstood: retirement planning for kids and young adults. Those Trump accounts I mentioned earlier are just one tool, but combining them with custodial Roth IRAs or 529 plans gives families a huge head start.
The concept is simple: let compounding work its magic. Even a small contribution early can turn into a substantial retirement fund decades later. And the best part is, it’s tax-advantaged growth.
00:42:10
Francisco Sirvent:
Okay, to wrap up, here’s my quick summary of the five biggest areas that impact most people:
Bonus Senior Deduction – Extra $6,000 for seniors 65+, big savings.
Trump Accounts – Free $1,000 + contributions for kids, grows tax-deferred.
Bonus Depreciation – 100% deduction in the first year for business/reinvestment.
Charitable Giving – Extra deduction even if you don’t itemize, slight reduction if you do.
Estate & Gift Tax Exemption – $15M per person, indexed for inflation, plus strategic planning for gifts and step-up in basis.
00:43:15
Francisco Sirvent:
I hope that gives you some concrete takeaways. The idea isn’t just to read about the law—it’s to identify a few nuggets that apply to your situation and act on them. Maybe it’s contributing to a Trump account for your newborn, or reviewing depreciation opportunities for your business, or even thinking about charitable giving differently this year.
00:44:00
Francisco Sirvent:
Alright, we’ve gone through the main content. I promised we’d save time for questions. If you have something you want to ask, drop it in the chat now, and I’ll answer as many as I can before our hard stop at 1:00.
00:44:16
Francisco Sirvent:
Laura, what do you got? You’ll need to unmute your mic.
Laura:
Okay. Is that okay?
Francisco Sirvent:
There you go.
Laura:
I was just wondering if you could give us some additional strategies that are either popular or reputable—other than solar or oil and gas.
Francisco Sirvent:
Yeah, those are really complicated strategies. Some of the more standard, “vanilla” strategies have always been in place and are still valid. The first one I always go to is Roth conversions, and for two reasons.
First, most people only think about Roth conversions from one perspective, but there are actually two:
00:45:28
Francisco Sirvent:
The first is for your own retirement. Roth conversions can reduce your overall tax burden and give you flexibility. Distributions aren’t mandatory when you reach a certain age, so you can access retirement funds on your schedule.
Second, it affects how the accounts are inherited. An IRA or 401(k) that’s inherited has a mandatory 10-year distribution period. Heirs must take the money out over 10 years, paying taxes on it as they go. If you convert it to a Roth first, then the inherited Roth distributions are tax-free. That means more years of growth and tax-free inheritance. That’s why I start with Roth conversions.
00:46:39
Francisco Sirvent:
Some of today’s strategies let you plan better for Roth conversions, so when you convert an IRA to a Roth, you can reduce taxable income in that year. We try to combine mini-strategies with the conversion instead of just moving $100,000 and taking $100,000 in tax.
Another strategy to know about is Qualified Charitable Distributions (QCDs). When you’re forced to take IRA distributions (RMDs), you can direct gifts to charities straight from your IRA. This counts toward your RMD, doesn’t add to your taxable income, and goes directly to the charity. That’s a big advantage for those who give regularly.
Laura:
Okay, thank you.
Francisco Sirvent:
You bet.
00:48:45
Francisco Sirvent:
Question in the chat: “What income does the bonus deduction phase out completely?” I’d have to check my notes. Bonus depreciation is more flexible for active businesses than passive ones.
Penny:
“Was there anything in the new bill regarding capital gains when selling real estate, especially rental properties?”
Francisco Sirvent:
Not directly. The main thing is the extension of Opportunity Zones. You can sell a property with capital gains, roll the proceeds into an Opportunity Zone, and if you hold that investment for 10 years, the gain is tax-free. It’s mostly real estate-focused and requires the right setup.
Laura:
Does this apply to 2025 or 2026?
Francisco Sirvent:
A lot starts this year. Some, like tax brackets, start next year. Bonus depreciation is permanent for qualified business property, though some provisions expire at the end of 2028.
Janet:
Can you explain the $6,000 deduction related to AGI and if you can reduce AGI by making more contributions from your RMD?
Francisco Sirvent:
Yes. The bonus deduction phases out: singles above $75,000, married couples above $150,000. Timing of income and above-the-line deductions can affect how much of the deduction you get—definitely a planning opportunity.
00:53:30
Francisco Sirvent:
Any other questions? I think I’m managing the Q&A okay.
Kathy:
I inherited my parents’ house. I want my grandson (34) to inherit it. Do I need to wait until I pass to avoid high taxes, or could I put the house in both our names?
Francisco Sirvent:
Good question. Generically speaking: when someone inherits property, they get a step-up in basis—the property’s fair market value at your death. For example, you buy a house for $50k, it’s worth $400k at death—the heir’s basis is $400k. If they sell immediately, they pay zero capital gains tax.
Changing the title during your life is considered a gift, which keeps your original basis, potentially creating a worse tax result. Joint ownership can be problematic because the heir gets your basis for their portion—no step-up.
A specialized trust can allow someone to live in the property now and still get a step-up in basis at your death. A beneficiary deed also works—it steps up at death. Essentially, either keep it yourself until death or use a specialized trust.
Kathy:
Okay, thank you.
Francisco Sirvent:
You bet. A few more minutes—questions like business deductions in a family trust can apply if the purchase qualifies under tax rules.
01:00:02
James:
Can you hear me?
Francisco Sirvent:
Yeah, good.
James:
About the $6,000 deduction—you said it phases out at $75k?
Francisco Sirvent:
Yes, it starts to phase out there. The details are in my notes, but the main takeaway: grab the deduction while it’s available.
James:
Got it.
Francisco Sirvent:
Alright, I’m going to wrap up. Thank you all for joining. My calendar link is in the chat for a free 15-minute call if you want to discuss your personal situation.
James:
When did [someone] come back?
Francisco Sirvent:
He came last week.
James:
Thanks.
Francisco Sirvent:
Alright, everyone—have a great day!
James:
You too. Bye.
Francisco Sirvent:
Thank you. Bye-bye.
