For RE owners, death allows you to pass assets to your heirs and step up in basis, effectively eliminating recapture.

RE investors do this type of structure all the time (though most don't house hack).

I'm a licensed RE agent, contractor, and investor. 

It's almost like "re-buying" the property but at the ARV.

Quote from @John Keane: @Jay HinrichsGot it, I will definitely re-evaluate my profit split structure after what I have learned here. 

I own property and do interior design for rental and investment properties so I stay up to date from my clients and local events I attend through RE associations and meetups which I recommend.

You can break it out by general RE activities and material participation.

Any experience with RE investing? 

I am a moderately experienced RE investor looking for advice on investing in high-equity growth opportunities. 

Especially CA folks who are so in tuned to RE and owning RE as you know look at all the CA investors that flock to the mid west and rust belt to buy rentals.