Accelerated Depreciation Real Estate Funds

Bonus depreciation in real estate is a strategy for smarter investing. Breakwater Exchange’s funds are built to reduce taxable income and elevate after-tax returns for investors with substantial gains or passive income.

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Maximize Tax Efficiency with Accelerated Depreciation Real Estate Funds

At Breakwater Exchange, our accelerated depreciation real estate funds are designed for investors with significant passive income, capital gains, or 1031 exchange needs. These funds harness bonus depreciation strategies to offset taxable income or gains, helping you preserve more of your capital and invest with powerful tax advantages.

What Is a Bonus Depreciation Real Estate Fund?

An accelerated depreciation real estate fund uses cost segregation studies to identify assets that can be depreciated quickly under current tax law. By front-loading these deductions, investors in the fund receive substantial paper losses in year one, which can be applied against qualifying income to reduce overall tax liability.

Receive a Bonus Depreciation Proposal From Breakwater Exchange

Breakwater Exchange will help you determine if accelerated depreciation is the right fit for your investment goals. Request a free, personalized fund analysis today and start building a more tax-efficient portfolio.

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Why Bonus Depreciation Funds From Breakwater Exchange Are So Powerful

Real estate is one of the only asset classes where investors can realize appreciation while simultaneously benefiting from depreciation deductions. At Breakwater Exchange, we apply these strategies in every step of our process for every qualifying acquisition:

  • Leveraging Bonus Depreciation: When a property is placed into service, we complete a cost segregation study to break down the asset into depreciable components. Qualifying components can be deducted all at once instead of being stretched over decades.
  • Depreciation Compounds Over Time: Even after year one’s bonus depreciation, remaining improvements continue to depreciate annually. This ongoing deduction reduces your effective tax rate year over year.
  • Built for High-Income Real Estate Investors: Whether you’re exiting a 1031 exchange, selling a high-performing asset, or collecting steady passive income, these funds allow you to offset a substantial portion of your tax burden immediately.
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FAQs About Our Accelerated Depreciation Funds

Yes. At Breakwater Exchange, we help investors strategically pair accelerated depreciation funds with their 1031 exchanges to offset taxable income and enhance after-tax returns.

Every situation is unique, but Breakwater Exchange clients commonly offset 40–50% of their income in year one. We guide you through fund selection to maximize eligibility and impact.

Breakwater Exchange curates funds featuring high-quality commercial and residential assets with strong fundamentals and substantial depreciable components, optimizing your tax position from the start.

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Breakwater Exchange’s expert guidance helps you maximize returns while minimizing tax exposure, so you can invest with clarity and confidence.

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General Disclosure
All investing involves risk of loss of some or all principal invested. Past performance is not indicative of future performance. There can be no guarantee that any investment or strategy will achieve its stated objectives. Speak to your tax and/or financial professional prior to investing.

Real Estate / 1031 Risk Disclosure
There is no guarantee that any strategy will be successful or achieve investment objectives; Potential for property value loss – All real estate investments have the potential to lose value during the life of the investments; Change of tax status – The income stream and depreciation schedule for any investment property may affect the property owner’s income bracket and/or tax status. An unfavorable tax ruling may cancel deferral of capital gains and result in immediate tax liabilities; Potential for foreclosure – All fnanced real estate investments have potential for foreclosure; Illiquidity –These assets are commonly offered through private placement offerings and are illiquid securities. There is no secondary market for these investments;Reduction or Elimination of Monthly Cash Flow Distributions – Like any investment in real estate, if a property unexpectedly loses tenants or sustains substantial damage, there is potential for suspension of cash flow distributions; Impact of fees/expenses – Costs associated with the transaction may impact investors’ returns and may outweigh the tax benefts. Stated tax benefts – Any stated tax benefts are not guaranteed and are subject to changes in the tax code. Speak to your tax professional prior to investing.

Opportunity Zones Disclosures
Investing in opportunity zones is speculative. Opportunity zones are newly formed entities with no operating history. There is no assurance of investment return, property appreciation, or profits. The ability to resell the fund’s underlying investment properties or businesses is not guaranteed. Investing in opportunity zone funds may involve a higher level of risk than investing in other established real estate offerings. Long-term investment. Opportunity zone funds have illiquid underlying investments that may not be easy to sell and the return of capital and realization of gains, if any, from an investment will generally occur only upon the partial or complete disposition or refinancing of such investments. Limited secondary market for redemption. Although secondary markets may provide a liquidity option in limited circumstances, the amount you will receive typically is discounted to current valuations. Difficult valuation assessment. The portfolio holdings in opportunity zone funds may be difficult to value because financial markets or exchanges do not usually quote or trade the holdings. As such, market prices for most of a fund’s holdings will not be readily available. Capital call default consequences. Meeting capital calls to provide managers with the pledged capital is a contractual obligation of each investor. Failure to meet this requirement in a timely manner could elicit significant adverse consequences, including, without limitation, the forfeiture of your interest in the fund. Leverage. Opportunity zone funds may use leverage in connection with certain investments or participate in investments with highly leveraged capital structures. Leverage involves a high degree of financial risk and may increase the exposure of such investments to factors such as rising interest rates, downturns in the economy or deterioration in the condition of the assets underlying such investments. Unregistered investment. As with other unregistered investments, the regulatory protections of the Investment Company Act of 1940 are not available with unregistered securities. Regulation. It is possible, due to tax, regulatory, or investment decisions, that a fund, or its investors, are unable realize any tax benefits. You should evaluate the merits of the underlying investment and not solely invest in an opportunity zone fund for any potential tax advantage.