July 6, 2025 • 11 mins
Jim Ross is based in Phoenix Arizona where he is a partner at the accounting firm Pro Vision. On today's show we are talking about the provisions of the latest US tax legislation that was signed into law on July 4. The focus of our conversation is the aspects that specifically affect real estate investors.
To connect with Jim, visit https://www.provisionwealth.com/
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
(00:01):
Welcome to the Real Estate Express, a podcast your morning
shot of what's new in the world of real estate investing.
I'm your host, Victor Minash. This is the WEEKEND edition
where we interview notable people from the world of real
estate investing. Today is no exception.
We have a great guest all the way from Phoenix, AZ Welcome to
the show, Jim Ross. Thank you Victor, so pleased to
be joining today. Love the format of your show,
(00:22):
your name precedes itself, and just glad to be joining with you
today. Well, Jim, great to have you
here. You've been at this game a
while, and I'm excited to have this conversation.
There's a lot happening, especially around tax
legislation, but maybe before wedive into the details, perhaps
give a little bit of your back story and how you got to this
point in your journey. Yeah, absolutely.
(00:43):
So as you said, I grew up in Phoenix.
I'm an Arizona State Sun Devil. My first foray into accounting
in general was with two big publicly traded companies based
out of Phoenix. And so working at their, you
know, in house accounting departments and learning and
building relationships and things like that.
Several years into my career, let's call it five years, I
(01:04):
decided I wanted a shift. I wanted to work with small
business owners. Some of that was me getting a
feel of what, you know, big likeFortune 500 tech companies, for
example, feel like working at, you know, in the, in the realm
of, of accounting with them. And then, you know, wanting in
in contrast to that to work moreclosely with the, the business
(01:26):
owners themselves. And so some peers of mine kind
of nudged me in the right direction and came across
provision, which provisions beenaround for about 30 years and is
at the forefront of working withsmall business owners.
And so I came up in provision, you know, starting as a staff
all these years later, 12 years in, I'm a partner now.
(01:47):
We were very ingrained in sort of like the rich dad, poor dad
entrepreneurial mindset. The book Tax Free Wealth brought
a lot of clients from all over the country to provision.
And so we work with clients in all 50 states, all small
business owners in some capacity.
And, you know, we found that entrepreneurs are totally
underserved segment of the population.
(02:08):
You know, it's very simple. If you're just W2, you can
TurboTax or H&R Block fine. It's cheap, it's simple.
You have the great big corporations that go to BIG4
accounting firms and spend hundreds of thousands of dollars
on compliance. And then if you're, you know,
the guy running your own dental practice, where do you go?
I mean, it, it, it, it's, it's challenging that they're very
underserved. And, and what I hear the most is
(02:31):
my tax guy just kind of fills out the forms, right?
He's not giving me the support, the guidance, the strategy.
And so that's what we do. We sit down with our small
business owners and we say, hey,let's, let's look at your
structure. Let's make sure you're
structured, right? Let's make sure we're maximizing
all the tax deductions can apply.
Let's look at who's involved, whether it's friends or family,
(02:51):
make sure that's tax efficient, the estate planning components
and let's not leave anything on the table.
So that's me and that's what we do at Provision.
Well, Tom Wheelwright is a friend.
He's the author, of course, of the book called Tax Free Wealth.
In fact, the latest addition hasgot some wonderful Nuggets in
it. So I've got a lot of time for
Tom and in fact, the whole pro vision team.
(03:13):
One of the things that's certainly making headlines is
the legislation that went its way through the Congress and
then modified by the Senate. And we'll see finally what gets
signed into legislation. What's your perspective
specifically as it relates to real estate investors?
Some of the provisions that you're seeing are advantageous
for real estate or maybe even a step backwards.
(03:34):
Yeah. A lot of what's there is taking
the 2018 Tax Cuts and JOBS Act and either renewing it or making
some of those components permanent.
Potentially there are some new bits and pieces in this proposal
currently, but a lot of what's there is, is based on the prior
iteration. So for example, the qualified
(03:55):
business income deduction, QBI as we call it, which gave small
business owners a 20% deduction against their small business
profits, making that permanent and then also proposing to
increase that to 23%. So there's probably some
planning opportunities there if you have pass through companies
in the US and looking to maximize that tax deduction.
(04:17):
Some of that has to do with, youknow, especially with small
closely held S corps, for example, how much does the
shareholder pay themselves as a salary that can affect the QBI
deduction. So we do a lot of planning
around that. So I think that one's a good one
that that is getting enhanced aswell.
A lot of folks want to talk about bonus depreciation, OK,
Back in 2018, what they said is assets with a class life under
(04:40):
20 years, a bonus depreciation can apply at 100%.
So you deduct the cost of the asset in the year that it's
placed in service. That started the sunset and we
had, you know, last year was 60%.
This year we're at 40%. If they do nothing, it'll
continue to taper down like thatuntil it's zero in the next
couple of years. But the proposal suggests to
(05:04):
bring that back up to 100% for the next four years through the
end of 2029 at 100% expensing. So that if you're in real estate
and you know, cost segregation studies and, and you're looking
to accelerate deductions, that'sprobably the single biggest
thing in this bill that is goingto move the needle for you.
Any comments on any of that before I I you know I could
(05:26):
ramble on and on. Well, that's fantastic.
Now on the bonus depreciation side, is that going to sunset
right away in 2029 or do you expect it to be a declining
schedule as it is now? How do you think that's going to
terminate? Yeah, I would be surprised if it
didn't sunset like the last one did.
(05:46):
I haven't seen explicitly whether that's what they're
proposing or not. All I have seen for sure is that
the proposal suggests to make it100% through the end of 2029.
So, you know, history tells us alot of times what to what to
expect. And if you're a betting man, you
kind of bet on what's been done in the past.
So I wouldn't be surprised if wesee a sun setting again, but I
(06:10):
think it remains to be seen. One of the things that I've read
in the current legislation is a sun setting of a number of green
initiatives, including some of the tax credits associated, for
example, the 45 L for apartmentsand some of the tax credits for
solar that were under the Inflation Reduction Act.
What's your read on that? Well, so if you look at this
(06:32):
bill as it is, it's a very expensive bill.
It's going to add a huge amount of debt.
It's going to increase the deficit for many years.
And so some of what they look athere is what do we take away?
Where do we how do we help pay for this thing tariffs maybe
helps pay for part of it and reducing tax incentives in other
areas may pay for part of it. And, and so to what you're
(06:54):
speaking on the energy efficiency stuff, that's where
they're looking at taking. And I, I think some of those
things that are suggested in this proposal are going to
stick. I think that's their, this
administration's approach is, hey, let's, let's put it
incentives in place for poorer Americans and small business
owners and, and, and to some degree the big corporations too,
(07:17):
where our focus is on driving economic growth in the business
sector and, and less so, you know, incentivizing green
initiatives and things like that.
So I, what's there? I, I would be surprised if
changes. I, I think there's other things
that will change. You know, that I think the salt
tax limitation of, of 30 thousandths currently 10 and
(07:37):
they're proposing 30. I'd be surprised if that one
doesn't change. You know, the child tax credits
always a hot topic that they bandy about the R&D, we'd love
to see the R&D proposal go through because they're bringing
R&D back to 100% expensing for the next several years.
So I, I think those components are more likely to be negotiated
(08:00):
over. I I think the, the, the energy
efficiency stuff unfortunately is probably going to fall by the
wayside. Yeah, I think that's an accurate
read, certainly from my vantage point.
What about what are you seeing in Opportunity Zones?
Yeah. I, I, if what's there goes
through, I'm excited for that. So if you remember, opportunity
zones came about in 2018 and it allowed you to defer the gains,
(08:25):
the tax on your gains through the end of 2026.
And so that's right on the, you know, on the horizon here.
And so putting something into Opportunity Zone right now isn't
nearly as much of A benefit as it was back in 18 because you
just can't defer that gain very far at this point.
But they're proposing a new round of Opportunity zones that
(08:48):
would be able to defer gains until 2033.
So some of the mechanisms in this latest proposal are are
slightly different than the lastone for Opportunity zone.
So for example, last year you had like a five year and a
seven-year permanent basis adjustment on your prior gain
where you know, it was like 10% and 5% respectively, that you
(09:12):
could basically trim off of the gain from, you know, ever having
to pay tax on that. This time I think what it says
is five years in, we're going togive you a 10%.
So imagine you had $1,000,000 gain, you sold an asset, you
sold a business or something. And at that five year mark of
holding your opportunity zone investment, you take $100,000 of
(09:33):
gain off of that million and it's just permanently gone, OK.
And then all the other benefits that they're suggesting are, are
kind of similar as far as, OK, I'm going to hold this new
investment in the opportunity zone for 10 years and all the
gains that accumulated on that asset in the zone for those 10
years, I get to avoid all the gains permanently on that new
(09:55):
asset. So incentivizing you obviously
put investment into the zones and to hold those assets for
longer periods of time, right? I love it.
Well, Jim, if folks want to connect, if they want to learn
more, what's the best way? Yeah, so they can reach out to
me at jim.ross@provisionwealth.com.
I'd be happy to set up a tax consultation, just, you know, no
(10:17):
obligation. We'll just chat for a minute and
just see how we can help you outwith your tax planning,
structuring, all of that good stuff.
We can file your personal and business tax returns as well.
Our website isprovisionwealth.com and, and
there's a contact us link there as well.
So you can go to provisionwealth.com and request
to have a meeting with us. We'd love to meet with you and,
(10:39):
and we work with clients in all 50 States and from all different
kinds of industries. Let's see how we can help.
Awesome. Well, Jim, it's great to
connect. And for the listeners at home,
definitely reach out to Jim Rossat Provision.
The website isprovisionwealth.com.
The links will be in the show notes.
And in the meantime, have an awesome rest of your weekend.
(11:00):
Go make some great things happen.
We'll talk to you again tomorrow.
Welcome to the Real Estate Express, a podcast your morning
shot of what's new in the world of real estate investing.
I'm your host, Victor Minash. This is the WEEKEND edition
where we interview notable people from the world of real
estate investing. Today is no exception.
We have a great guest all the way from Phoenix, AZ Welcome to
the show, Jim Ross. Thank you Victor, so pleased to
be joining today. Love the format of your show,
(00:22):
your name precedes itself, and just glad to be joining with you
today. Well, Jim, great to have you
here. You've been at this game a
while, and I'm excited to have this conversation.
There's a lot happening, especially around tax
legislation, but maybe before wedive into the details, perhaps
give a little bit of your back story and how you got to this
point in your journey. Yeah, absolutely.
(00:43):
So as you said, I grew up in Phoenix.
I'm an Arizona State Sun Devil. My first foray into accounting
in general was with two big publicly traded companies based
out of Phoenix. And so working at their, you
know, in house accounting departments and learning and
building relationships and things like that.
Several years into my career, let's call it five years, I
(01:04):
decided I wanted a shift. I wanted to work with small
business owners. Some of that was me getting a
feel of what, you know, big likeFortune 500 tech companies, for
example, feel like working at, you know, in the, in the realm
of, of accounting with them. And then, you know, wanting in
in contrast to that to work moreclosely with the, the business
(01:26):
owners themselves. And so some peers of mine kind
of nudged me in the right direction and came across
provision, which provisions beenaround for about 30 years and is
at the forefront of working withsmall business owners.
And so I came up in provision, you know, starting as a staff
all these years later, 12 years in, I'm a partner now.
(01:47):
We were very ingrained in sort of like the rich dad, poor dad
entrepreneurial mindset. The book Tax Free Wealth brought
a lot of clients from all over the country to provision.
And so we work with clients in all 50 states, all small
business owners in some capacity.
And, you know, we found that entrepreneurs are totally
underserved segment of the population.
(02:08):
You know, it's very simple. If you're just W2, you can
TurboTax or H&R Block fine. It's cheap, it's simple.
You have the great big corporations that go to BIG4
accounting firms and spend hundreds of thousands of dollars
on compliance. And then if you're, you know,
the guy running your own dental practice, where do you go?
I mean, it, it, it, it's, it's challenging that they're very
underserved. And, and what I hear the most is
(02:31):
my tax guy just kind of fills out the forms, right?
He's not giving me the support, the guidance, the strategy.
And so that's what we do. We sit down with our small
business owners and we say, hey,let's, let's look at your
structure. Let's make sure you're
structured, right? Let's make sure we're maximizing
all the tax deductions can apply.
Let's look at who's involved, whether it's friends or family,
(02:51):
make sure that's tax efficient, the estate planning components
and let's not leave anything on the table.
So that's me and that's what we do at Provision.
Well, Tom Wheelwright is a friend.
He's the author, of course, of the book called Tax Free Wealth.
In fact, the latest addition hasgot some wonderful Nuggets in
it. So I've got a lot of time for
Tom and in fact, the whole pro vision team.
(03:13):
One of the things that's certainly making headlines is
the legislation that went its way through the Congress and
then modified by the Senate. And we'll see finally what gets
signed into legislation. What's your perspective
specifically as it relates to real estate investors?
Some of the provisions that you're seeing are advantageous
for real estate or maybe even a step backwards.
(03:34):
Yeah. A lot of what's there is taking
the 2018 Tax Cuts and JOBS Act and either renewing it or making
some of those components permanent.
Potentially there are some new bits and pieces in this proposal
currently, but a lot of what's there is, is based on the prior
iteration. So for example, the qualified
(03:55):
business income deduction, QBI as we call it, which gave small
business owners a 20% deduction against their small business
profits, making that permanent and then also proposing to
increase that to 23%. So there's probably some
planning opportunities there if you have pass through companies
in the US and looking to maximize that tax deduction.
(04:17):
Some of that has to do with, youknow, especially with small
closely held S corps, for example, how much does the
shareholder pay themselves as a salary that can affect the QBI
deduction. So we do a lot of planning
around that. So I think that one's a good one
that that is getting enhanced aswell.
A lot of folks want to talk about bonus depreciation, OK,
Back in 2018, what they said is assets with a class life under
(04:40):
20 years, a bonus depreciation can apply at 100%.
So you deduct the cost of the asset in the year that it's
placed in service. That started the sunset and we
had, you know, last year was 60%.
This year we're at 40%. If they do nothing, it'll
continue to taper down like thatuntil it's zero in the next
couple of years. But the proposal suggests to
(05:04):
bring that back up to 100% for the next four years through the
end of 2029 at 100% expensing. So that if you're in real estate
and you know, cost segregation studies and, and you're looking
to accelerate deductions, that'sprobably the single biggest
thing in this bill that is goingto move the needle for you.
Any comments on any of that before I I you know I could
(05:26):
ramble on and on. Well, that's fantastic.
Now on the bonus depreciation side, is that going to sunset
right away in 2029 or do you expect it to be a declining
schedule as it is now? How do you think that's going to
terminate? Yeah, I would be surprised if it
didn't sunset like the last one did.
(05:46):
I haven't seen explicitly whether that's what they're
proposing or not. All I have seen for sure is that
the proposal suggests to make it100% through the end of 2029.
So, you know, history tells us alot of times what to what to
expect. And if you're a betting man, you
kind of bet on what's been done in the past.
So I wouldn't be surprised if wesee a sun setting again, but I
(06:10):
think it remains to be seen. One of the things that I've read
in the current legislation is a sun setting of a number of green
initiatives, including some of the tax credits associated, for
example, the 45 L for apartmentsand some of the tax credits for
solar that were under the Inflation Reduction Act.
What's your read on that? Well, so if you look at this
(06:32):
bill as it is, it's a very expensive bill.
It's going to add a huge amount of debt.
It's going to increase the deficit for many years.
And so some of what they look athere is what do we take away?
Where do we how do we help pay for this thing tariffs maybe
helps pay for part of it and reducing tax incentives in other
areas may pay for part of it. And, and so to what you're
(06:54):
speaking on the energy efficiency stuff, that's where
they're looking at taking. And I, I think some of those
things that are suggested in this proposal are going to
stick. I think that's their, this
administration's approach is, hey, let's, let's put it
incentives in place for poorer Americans and small business
owners and, and, and to some degree the big corporations too,
(07:17):
where our focus is on driving economic growth in the business
sector and, and less so, you know, incentivizing green
initiatives and things like that.
So I, what's there? I, I would be surprised if
changes. I, I think there's other things
that will change. You know, that I think the salt
tax limitation of, of 30 thousandths currently 10 and
(07:37):
they're proposing 30. I'd be surprised if that one
doesn't change. You know, the child tax credits
always a hot topic that they bandy about the R&D, we'd love
to see the R&D proposal go through because they're bringing
R&D back to 100% expensing for the next several years.
So I, I think those components are more likely to be negotiated
(08:00):
over. I I think the, the, the energy
efficiency stuff unfortunately is probably going to fall by the
wayside. Yeah, I think that's an accurate
read, certainly from my vantage point.
What about what are you seeing in Opportunity Zones?
Yeah. I, I, if what's there goes
through, I'm excited for that. So if you remember, opportunity
zones came about in 2018 and it allowed you to defer the gains,
(08:25):
the tax on your gains through the end of 2026.
And so that's right on the, you know, on the horizon here.
And so putting something into Opportunity Zone right now isn't
nearly as much of A benefit as it was back in 18 because you
just can't defer that gain very far at this point.
But they're proposing a new round of Opportunity zones that
(08:48):
would be able to defer gains until 2033.
So some of the mechanisms in this latest proposal are are
slightly different than the lastone for Opportunity zone.
So for example, last year you had like a five year and a
seven-year permanent basis adjustment on your prior gain
where you know, it was like 10% and 5% respectively, that you
(09:12):
could basically trim off of the gain from, you know, ever having
to pay tax on that. This time I think what it says
is five years in, we're going togive you a 10%.
So imagine you had $1,000,000 gain, you sold an asset, you
sold a business or something. And at that five year mark of
holding your opportunity zone investment, you take $100,000 of
(09:33):
gain off of that million and it's just permanently gone, OK.
And then all the other benefits that they're suggesting are, are
kind of similar as far as, OK, I'm going to hold this new
investment in the opportunity zone for 10 years and all the
gains that accumulated on that asset in the zone for those 10
years, I get to avoid all the gains permanently on that new
(09:55):
asset. So incentivizing you obviously
put investment into the zones and to hold those assets for
longer periods of time, right? I love it.
Well, Jim, if folks want to connect, if they want to learn
more, what's the best way? Yeah, so they can reach out to
me at jim.ross@provisionwealth.com.
I'd be happy to set up a tax consultation, just, you know, no
(10:17):
obligation. We'll just chat for a minute and
just see how we can help you outwith your tax planning,
structuring, all of that good stuff.
We can file your personal and business tax returns as well.
Our website isprovisionwealth.com and, and
there's a contact us link there as well.
So you can go to provisionwealth.com and request
to have a meeting with us. We'd love to meet with you and,
(10:39):
and we work with clients in all 50 States and from all different
kinds of industries. Let's see how we can help.
Awesome. Well, Jim, it's great to
connect. And for the listeners at home,
definitely reach out to Jim Rossat Provision.
The website isprovisionwealth.com.
The links will be in the show notes.
And in the meantime, have an awesome rest of your weekend.
(11:00):
Go make some great things happen.
We'll talk to you again tomorrow.
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