The Future of Cost Segregation Under Trump

Insights from the CEO of USA Cost Segregation

From the desk of Richmond Stecker:

As we officially launch USA Cost Segregation in partnership with The Strategic Group, I am thrilled to share my perspective on the opportunities that lie ahead for the commercial real estate industry. With years of experience leading The Richmond Taylor Group and Net Profit Advisors, and now with the incredible team at The Strategic Group—James Freeman, Ricky Novak, and Steve Rothschild—we are positioned to deliver unparalleled expertise and strategic value to our clients. Our mission is clear: to empower investors with innovative tax strategies that maximize returns and fuel growth. 

The return of President Donald Trump to the White House is a pivotal moment for real estate investors. Known for his pro-business policies, during President Trump’s administration in 2016 – 2020, he reshaped the tax landscape with measures that directly benefited our industry. The 2017 Tax Cuts and Jobs Act (TCJA) introduced game-changing provisions, such as 100% Bonus Depreciation and critical corrections to Qualified Improvement Property regulations, which enabled investors to unlock significant cash flow advantages. 

Bonus Depreciation: A Critical Tool in a Changing Environment 

Since 2022, the gradual reduction of Bonus Depreciation has presented challenges for real estate investors. Set to decline to 40% in 2025 and phase out by 2027, these reductions have raised concerns. Nevertheless, I remain optimistic about the resilience and adaptability of Cost Segregation as a cornerstone tax strategy for all investors. Even without full Bonus Depreciation, Cost Segregation continues to deliver unmatched value by accelerating the depreciation of eligible assets, allowing investors to defer taxes and reinvest their capital more effectively. 

Looking ahead, the Trump administration offers renewed hope for restoring the incentives that have fueled growth in the past. With a Republican-controlled House and Senate, the likelihood of reinstating 100% Bonus Depreciation is strong. This would provide a significant boost to real estate investors and developers, aligning tax policy with the administration’s ambitious economic goals. 

Navigating Four Years of Tax Policy Shifts 

The past four years have seen significant changes in tax law, which have required adaptability and strategic foresight from real estate investors. The phase-down of Bonus Depreciation, initiated by prior legislative decisions, has underscored the importance of proactive tax planning. Additionally, changes to the deductibility of business interest under IRC §1637 have added layers of complexity to real estate financing strategies. Throughout these shifts, Cost Segregation has proven to be a reliable and indispensable tool for mitigating tax burdens and optimizing cash flow. As we anticipate further developments under the Trump administration, our focus remains on helping clients stay ahead of these changes and capitalize on emerging opportunities. 

Leveraging 1031 Exchanges with Cost Segregation 

One of the most powerful strategies available to real estate investors is pairing 1031 exchanges with Cost Segregation studies. A 1031 exchange allows investors to defer capital gains taxes by reinvesting proceeds from a property sale into a like-kind property. When combined with Cost Segregation, this strategy maximizes tax savings by accelerating depreciation on the newly acquired property; this results in enhanced cash flow and greater reinvestment potential. 

The ability to defer taxes through 1031 exchanges remains intact under the current tax law, and we expect this provision to remain a foundation of real estate investment strategy. However, as tax policies evolve, investors should remain vigilant. Any future changes to 1031 exchanges could increase their effectiveness when paired with Cost Segregation. At USA Cost Segregation, we work closely with clients to ensure they understand the interplay between these strategies and adapt to potential policy shifts while maintaining their tax advantages. 

Building the Future: Freedom Cities and Manufacturing Expansion 

President Trump’s bold vision for “Freedom Cities”—innovative urban hubs designed to transform American living standards—is a compelling signal of what’s to come. These initiatives, coupled with a renewed focus on U.S. manufacturing, will undoubtedly drive demand for new developments, from industrial facilities to logistics hubs. As we anticipate policies that encourage such growth, investors must position themselves to take advantage of these opportunities. 

Our role at USA Cost Segregation is to ensure that our clients are prepared to navigate these changes with confidence. By leveraging Cost Segregation, we help investors maximize their tax savings and reinvest in projects that contribute to their success and the broader economy. The potential return of 100% Bonus Depreciation would only amplify these benefits, but even in its absence, the strategies we implement provide a robust foundation for growth. 

Trusted Expertise, Unmatched Results

 

At USA Cost Segregation, we pride ourselves on delivering expert guidance and proven results. Partnering with The Strategic Group amplifies our ability to serve clients with unparalleled precision and insight. As someone who has dedicated my career to helping investors succeed, I can confidently say that there has never been a better time to invest in the future of real estate. 

Whether you’re looking to navigate new tax laws, optimize your portfolio, or unlock untapped potential in your properties, our team is here to guide you every step of the way. Together, we’ll make 2025 a year of unprecedented growth and opportunity.