Anchors and flags
Deals present tax benefits in two shapes. An anchor is the deal's headline tax figure—a percentage it leads with, like a bonus-depreciation write-off. A deal leads with at most one anchor. Flags are qualitative qualifiers—1031-eligible, Opportunity Zone—that can sit alongside an anchor.
The catalog below is the complete set a deal on the platform can claim. If a summary names a benefit that isn't in this list, that's a question to raise, not a bonus to celebrate.
Bonus Depreciation
Front-loads most of a real asset's depreciation write-off into year one—shelters passive income the deal produces early. Anchor—carries the deal's headline figure (e.g. 60% in year one).
Typically: Real estate (multifamily, self-storage, industrial), infrastructure, and commodities—any deal that owns depreciable property.
Asset Depreciation
Spreads the same depreciation write-off evenly over the hold instead of front-loading it—available on nearly every real-asset deal. Anchor—carries the deal's headline figure (e.g. 25–40%).
Typically: The same population as bonus depreciation—real estate, infrastructure, and commodities deals with a depreciable basis.
QBI / 199A deduction
A deduction on qualified pass-through business income (profits that flow to your personal return instead of being taxed inside a company)—lowers the tax on the income the deal reports every year. Anchor—carries the deal's headline figure (e.g. 20%).
Typically: Private equity roll-ups and healthcare practices—pass-through operating businesses with qualified business income.
IDC deductibility
Oil & gas only—the labor, services, and supplies with no salvage value, typically most of a well's cost, deductible in year one. Anchor—carries the deal's headline figure (e.g. 80% in year one).
Typically: Oil & gas drilling deals only—a subset of commodities; doesn't apply to mining or metals.
Depletion allowance
Oil & gas only—shelters a slice of production income every year as the resource draws down, the mineral world's version of depreciation. Anchor—carries the deal's headline figure (e.g. 15%).
Typically: Oil & gas and mining production deals—commodities where a resource is physically drawn down over time.
1031 eligible
Lets a real-estate seller roll a sale's gain into this deal and defer the capital-gains tax, potentially indefinitely. Flag—a qualifier that can sit alongside an anchor.
Typically: Real estate only—direct property or DSTs (Delaware statutory trusts, a fractional-ownership wrapper built to accept 1031 money).
Opportunity zone
Lets an investor park a recent capital gain here—the original gain is deferred, and after a ten-year hold this investment's own appreciation can be tax-free. Flag—a qualifier that can sit alongside an anchor.
Typically: Development-stage real estate or infrastructure sited inside a designated Opportunity Zone census tract.
Depreciation—the big one
Real assets wear out on paper faster than they do in life, and the tax code lets owners deduct that paper loss against income. Bonus depreciation front-loads a large share of the deduction into year one—the exact percentage is set by current tax law and stated per deal. Straight-line asset depreciation spreads the write-off evenly instead.
The result on your tax return is a passive paper loss that can shelter passive income—often making early distributions largely tax-deferred. You'll see it arrive on a Schedule K-1, the tax form partnerships issue to their investors.
Cedar Court reports a 60% year-one bonus depreciation figure. Your first K-1 could show a paper loss even while the quarterly checks arrive—cash in hand now, much of the tax deferred until the sale.
The energy pair: IDC and depletion
Oil and gas deals carry two advantages most other classes can't. Intangible drilling costs—labor, services, supplies with no salvage value, typically the majority of a well's cost—can be deductible in year one. Depletion then shelters a slice of the production income every year as the resource draws down, the mineral world's version of depreciation.
The deferral plays: 1031 and Opportunity Zones
A 1031 exchange lets a real-estate seller roll gains into the next like-kind property and defer the capital-gains tax—the tax owed on an investment's profit when it sells—potentially indefinitely. '1031-eligible' on a deal means it is structured to accept those exchange dollars—a big deal for an investor sitting on a sale.
Opportunity Zone deals let an investor park recent capital gains in designated areas: the original gain is deferred, and after a ten-year hold the appreciation on the new investment can be tax-free. Powerful, specific, and only relevant to someone actually holding a fresh gain.
The fine print
Three caveats. Passive losses generally offset passive income, not a salary—the exceptions, like real-estate-professional status, are exactly that, exceptions. Depreciation taken now is often recaptured at sale, so 'tax-free' distributions are frequently 'tax-deferred'. And every one of these benefits lands differently depending on the investor's own situation.
That's why the rule for anyone discussing deals is: describe what the deal offers, never what an investor should do. 'This deal reports a 60% year-one bonus depreciation figure' is information. 'You'll wipe out your tax bill' is advice—and it's not ours to give.
One anchor figure per deal, plus flags. A tax benefit that isn't in the catalog is a question to raise, not a bonus.
Depreciation creates paper losses that shelter passive income—arriving on a K-1, and often recaptured at the sale.
Describe what the deal reports; never promise what it does to someone's tax bill. That call belongs to their advisor.
Reading it is half the job. Run the drills until the answers come without thinking.
Lost on a term? The glossary has every definition in one place.
Educational content only—not investment, legal, or tax advice. Every figure used in examples is hypothetical, including Cedar Court, which is a fictional deal.