Cost segregation expert Richmond Stacker (CEO, USA Cost Segregation) joins Tommy Thompson and Justin Kiehne to unpack the tax code’s most powerful real estate tool. This episode covers the cost segregation fundamentals, why the short-term rental “loophole” is a trap, the recapture arbitrage most investors miss, and how the One Big Beautiful Bill made 100% bonus depreciation permanent starting January 19, 2025.

Key Takeaways

• Cost seg = an engineering study that reclassifies building assets into 5-, 7-, and 15-year property, front-loading 30–40% of your basis into year-one deductions.

• 100% bonus depreciation is BACK — and permanent — for property placed in service on or after January 19, 2025 under the OBBBA.

• QIP expensing (HVAC, roof, flooring) sunsets Dec 31, 2029. That piece isn’t permanent — the clock is ticking.

• Not for everyone. Skip cost seg on properties under ~$500K, on properties you’re about to sell, or when you already have losses.

• The short-term rental “loophole” is a trap. 100-hour material participation, no property manager, no 7+ day stays — most investors don’t actually qualify.

• Recapture is real, but so is the arbitrage. Offset income at 37%, recapture at 25%, and use a 1031 exchange to eliminate it entirely.

• Bought property in 2022–2024 without doing cost seg? Not too late. A Form 3115 catch-up can convert taxes owed into a refund.

• The math checks out. One client paid ~$7K more for a proper study and captured an additional $400K in tax savings.

Chapters

00:00 Intro — why cost seg is the most powerful tool you’re not using

02:00 How to explain cost seg at a cocktail party

04:00 Straight-line vs. accelerated — the $1M property math

09:00 Who’s a good candidate (and who isn’t)

19:00 The short-term rental trap

28:30 Recapture, arbitrage, and the 1031 escape hatch

33:00 Richmond’s origin story

34:00 Why cost seg is tax code, not a loophole

38:00 100% bonus depreciation and the One Big Beautiful Bill

44:00 The January 19, 2025 line in the sand

47:00 Form 3115 catch-up for 2022–2024 properties

52:30 ROI: $7K spend, $400K in tax savings

54:00 What’s next for the industry

About the Guest

Richmond Stacker

Founder & CEO | USA Cost Segregation

Richmond is Founder & CEO of USA Cost Segregation, a national engineering-led cost seg firm. A former mortgage broker who taught himself the tax code, he built his first proprietary cost seg software in 2019 and runs a team known for fast turnarounds and candid advisory — including telling clients when NOT to do a study.

Contact: info@usacostsegregation.com | usacostsegregation.com

Keywords

Primary

cost segregation • 100% bonus depreciation • One Big Beautiful Bill • OBBBA • real estate tax strategy • bonus depreciation permanent

Secondary & Long-Tail

Section 168(k) • depreciation recapture • 1031 exchange • real estate professional status • Form 3115 • short-term rental loophole • QIP expensing • accelerated depreciation • USA Cost Segregation • Richmond Stacker • cost seg for 2022–2024 acquisitions

Tags

real estate, passive income, tax strategy, cost segregation, bonus depreciation, real estate investing, commercial real estate, tax planning

Disclaimer

Educational purposes only — not tax, legal, or investment advice. Consult your CPA and a qualified cost segregation firm before initiating a study.

Tax attorney and CPA Austin Carlson of Gray Reed breaks down partnership 1031 strategies (drop-and-swap, PIN notes, TICs) and the new Opportunity Zones 2.0 program made permanent under the One Big Beautiful Bill Act. If you own real estate with partners or are planning a business exit, this episode lays out the structures wealthy investors are using to defer — and often eliminate — capital gains tax.

Key Takeaways

• Solo 1031s are simple. Partnership 1031s require careful planning. When partners have different goals, involving a tax attorney early can help avoid costly mistakes.

• A “Drop and Swap” separates partner interests before a sale. Some partners can cash out while others complete their own 1031 exchanges. The IRS closely examines timing and intent.

• A Partnership Installment Note (PIN) can help when timing is tight. It allows an exiting partner to receive most proceeds upfront while keeping the partnership intact.

• QOZ 2.0 expands tax benefits beyond real estate. Beginning January 1, 2027, gains from real estate, businesses, crypto, and art may qualify for Opportunity Zone benefits.

• QOZs preserve basis, while 1031s require full reinvestment. Investors only need to reinvest the gain in a QOZ, which can provide greater liquidity.

• A Qualified Opportunity Fund (QOF) can be a backup plan. If a 1031 exchange falls through, a QOF may provide an alternative way to defer gains.

Chapters

00:00 Intro: Partnership Structuring, OZ 1.0 vs. OZ 2.0

00:47 Meet Austin Carlson (JD, CPA)

02:00 Tax Attorney vs. Accountant

04:35 When to Involve a Tax Attorney in a 1031

07:55 "Drop and Swap" Strategies Explained

10:30 Partnership Exit Scenarios and Loan Challenges

14:00 Partnership Installment Note (PIN Note)

17:55 IRS Intent Rules and Partnership Considerations

20:00 When a Tax Attorney Is Worth the Cost

23:00 Case Study: $50M Texas Ranch Exchange

26:30 Opportunity Zones for Art, Business, and Real Estate Gains

28:20 QOZ Origins and Evolution

31:00 1031 Exchanges vs. Opportunity Zones

35:30 Core QOZ Benefits: Defer, Reduce, Eliminate

38:00 QOZ 2.0 and Permanent Tax Incentives

40:30 Deferral, Basis Step-Up, and Tax-Free Growth Explained

43:00 $1M Gain Example Breakdown

44:30 New QOZ Maps and Substantial Improvement Rules

47:30 QOZ vs. 1031: Which Strategy Wins?

52:00 Timing Rules, K-1 Extensions, and 180-Day Deadlines

54:30 Using a QOZ as a Backup for a Failed 1031

56:00 Creating Your Own Opportunity Zone Fund

58:00 Existing Property Owners in Opportunity Zones

1:00:00 Wrap-Up and Future Discussion

About the Guest

Austin Carlson, JD, CPA

Partner | Gray Reed & McGraw LLP | Houston, Texas

Austin is a tax attorney and CPA at Gray Reed, focused on complex real estate structuring, partnership planning, 1031 exchanges, Opportunity Zone funds, and M&A. Named Houston CPA Society’s “Young CPA of the Year” and a Texas Super Lawyers Up-and-Coming 100 honoree, he serves on the Texas Society of CPAs Federal Tax Policy committee and works nationally with sponsors, family offices, and business owners on transactions from a few million to nine figures.

Connect with Austin: grayreed.com/our-people/austin-c-carlson

Keywords

Primary

Opportunity Zones 2.0 • One Big Beautiful Bill • Drop and Swap 1031 • 1031 exchange partnership • Qualified Opportunity Fund • OZ 2.0 • capital gains deferral • OBBBA opportunity zones

Secondary & Long-Tail

Section 1031 • TIC exchange • PIN note • partnership installment note • swap til you drop • QOF • OZ vs 1031 • sell business defer capital gains • baby boomer business exit • new opportunity zone map 2026 • build your own opportunity zone fund

Tags

real estate, passive income, tax strategy, 1031 exchange, opportunity zones, partnership tax, real estate law, M&A, business exit, capital gains

Disclaimer

This is for informational purposes only, does not constitute individual investment advice, and should not be relied upon as tax or legal advice. Please consult the appropriate professional regarding your individual circumstance.

Because investor situations and objectives vary this information is not intended to indicate that an investment is appropriate for or is being recommended to any individual investor.

There are material risks associated with investing in private placements, Delaware Statutory Trusts ("DSTs") and real estate securities including the potential loss of the entire investment principal, illiquidity, tenant vacancies impacting income and revenue, general and real estate market conditions, lack of operating history, interest rate risks, competition, including the risk of new supply coming to market and softening rental rates, general risks of owning/operating commercial and multifamily properties, short term leases associated with multi-family properties, financing risks, potential adverse tax consequences, general economic risks, development risks, long hold periods, and investors should read the PPM carefully before investing paying special attention to the risk section.

Risks associated with 1031 exchange- A 1031 exchange has an identification period of 45 days from the sale of the relinquished property to identify a potential replacement property or properties depending on the value of the previous property. To defer all capital gains tax, you must reinvest the entire net proceeds from the sale of the relinquished property into the replacement property and acquire debt on the new property that is equal to or greater than the debt on the property that was just sold and relinquished.

DST 1031 properties are only available to accredited investors which are typically defined as having a $1 million net worth excluding primary residence or $200,000 income individually/$300,000 jointly of the last two year.

The rules and regulations of the Qualified Opportunity Zone (QOZ) Program are complex, and compliance with the QOZ Program comes with significant challenges such as appreciation unpredictability, certain neighborhoods may be less accommodating to development, illiquidity for up to ten or more years, availability and cost of construction and development financing uncertainty, development and redevelopment real estate risks, as well as a number of Jobs Act interpretation uncertainty which may impact future risks, if any.

Securities offered through Concorde Investment Services, LLC (CIS), member FINRA/SIPC. Fortitude Investment Group, LLC is independent of CIS.

What You’ll Learn

• The basics of Section 1031 — a 100-year-old section of the tax code that lets you defer capital gains when exchanging investment real estate for like-kind investment real estate
• The real cost of NOT doing an exchange — 20% federal capital gains + state taxes (up to 13% in California) can mean a 30%+ haircut on your equity
• The critical timelines — day 0 (closing), day 45 (identification deadline), day 180 (purchase deadline), and why weekends and holidays count
• The three identification rules — with a deep dive into the three-property rule and why you should always use all three slots as “parachutes”
• The three rules for a fully tax-deferred exchange — equal or greater purchase price, reinvest all equity, and replace all debt
• Net lease vs. DSTs — the pros and cons of owning a single Home Depot or Walgreens versus buying a fractional interest in a diversified portfolio

Key Timestamps

• 00:00 — The misunderstood 1031 exchange
• 02:03 — The real math on a $1M sale: $300K–$400K in taxes to Uncle Sam
• 05:24 — Prep work and the qualified intermediary
• 07:50 — The 45/180 day clock and why end-of-year sales are dangerous
• 09:37 — The three identification rules (and the “parachute” strategy)
• 11:00 — Justin’s $10M Marina horror story
• 15:29 — The three rules for a fully tax-deferred exchange
• 18:15 — Like-kind, explained: it’s broader than you think
• 19:05 — Farm land → mobile home parks (a real client story)
• 21:02 — Net Lease 101
• 25:40 — DSTs: institutional real estate in $100K slices
• 29:02 — For the business-owner: sell the business and 1031 the real estate
• 32:27 — Passive lifestyle & real estate retirement

Who This Episode Is For

• Real estate investors considering a sale
• Business owners prepping for retirement
• Baby Boomers planning their real estate exit
• Growth investors using 1031s to build wealth faster
• Brokers, CPAs, and attorneys looking for client strategies

This is for informational purposes only, does not constitute individual investment advice, and should not be relied upon as tax or legal advice. Please consult the appropriate professional regarding your individual circumstance.

Because investor situations and objectives vary this information is not intended to indicate that an investment is appropriate for or is being recommended to any individual investor.

There are material risks associated with investing in private placements, Delaware Statutory Trusts ("DSTs") and real estate securities including the potential loss of the entire investment principal, illiquidity, tenant vacancies impacting income and revenue, general and real estate market conditions, lack of operating history, interest rate risks, competition, including the risk of new supply coming to market and softening rental rates, general risks of owning/operating commercial and multifamily properties, short term leases associated with multi-family properties, financing risks, potential adverse tax consequences, general economic risks, development risks, long hold periods, and investors should read the PPM carefully before investing paying special attention to the risk section.

Risks associated with 1031 exchange- A 1031 exchange has an identification period of 45 days from the sale of the relinquished property to identify a potential replacement property or properties depending on the value of the previous property. To defer all capital gains tax, you must reinvest the entire net proceeds from the sale of the relinquished property into the replacement property and acquire debt on the new property that is equal to or greater than the debt on the property that was just sold and relinquished.

DST 1031 properties are only available to accredited investors which are typically defined as having a $1 million net worth excluding primary residence or $200,000 income individually/$300,000 jointly of the last two year.

The rules and regulations of the Qualified Opportunity Zone (QOZ) Program are complex, and compliance with the QOZ Program comes with significant challenges such as appreciation unpredictability, certain neighborhoods may be less accommodating to development, illiquidity for up to ten or more years, availability and cost of construction and development financing uncertainty, development and redevelopment real estate risks, as well as a number of Jobs Act interpretation uncertainty which may impact future risks, if any.

Securities offered through Concorde Investment Services, LLC (CIS), member FINRA/SIPC. Fortitude Investment Group, LLC is independent of CIS.