1. QBI (§199A) Deduction Permanently Extended

The 20% pass-through deduction is now permanent. For SSTBs (law, accounting, medicine, consulting, etc.), phase-in thresholds increase significantly beginning in 2026.

What Partnerships Should Do

• Reassess QBI eligibility annually.
  
  

• Adjust partnership agreements if tied to sunsetting rules.
  
  

• Update partner tax projections starting in 2026.
  
  

2. Excess Business Loss Limitation Made Permanent

Partners in loss-generating partnerships will face limitations every year.

Impact

• Losses above the inflation-adjusted threshold become suspended and carried forward as NOLs.
  
  

Action Step

• Monitor partner basis, capital accounts, and projected losses carefully.
  
  

3. §163(j) Interest Limitation Returns to EBITDA Test

Partnerships can deduct more interest under the EBITDA formula.

Planning

• Reevaluate financing structures.
  
  

• Determine whether real estate partnerships should opt out.
  
  

4. §707 Disguised Sales and Guaranteed Payment Clarifications

The OBBBA makes these rules self-executing, meaning more transactions are treated as disguised sales.

Examples of impacted areas

• Capital contributions
  
  

• Distributions
  
  

• Partner loans
  
  

• Partner service arrangements
  
  

Action

• Document all related-party transactions carefully.
  
  

5. 100% Bonus Depreciation is Restored

Partnerships may immediately expense eligible property.

Best Uses

• Cost segregation studies
  
  

• Heavy equipment purchases
  
  

• New business assets
  
  

6. Immediate R&D Expensing

Domestic R&D costs no longer require amortization.

Applies to

Tech firms, engineering partnerships, biotech firms, manufacturing partnerships.

7. Partner Compensation (§707) Clarifications

Guaranteed payments and special allocations must be structured precisely.

Why It Matters

More partner compensation arrangements may now be reclassified.

Conclusion

The OBBBA fundamentally reshapes partnership taxation. With many provisions taking effect between 2025–2026, partnerships should begin planning immediately.

📞 Contact Z Tax & Accounting to schedule a consultation today by calling (214) 699-4790. We provide secure, remote tax filing and accounting services for partnerships nationwide and internationally.

Partnership FAQ's:      What is the late filing fee for a Partnership          What is the filing deadline for a Partnership Return          What are General Partners and Limited Partners          How is basis calculated in a Partnership          Understanding Form 1065 Line by Line          Understanding 1065 (K-1)          Understanding Partnership Basis          Understanding Schedule L for Partnerships          Understanding Partnership Agreement          General Partnership vs. Limited Partnership vs. Limited Liability Partnership          How Health Insurance Write-Offs Work in a Partnership          How Vehicle Expenses Are Deducted in a Partnership (Partner Vehicle Use)          Major Partnership-Relevant Changes per OBBBA 2025          How Section 199A (QBI deduction) affects partnerships, with special attention to Specified Service Trades or Businesses (SSTBs)