The U.S. tax code is 75,000 pages long. Roughly 400 new implementations get added every year. An average reader would need two and a half years just to get through it. Most high earners never crack the spine. They look at their tax bill, complain about it, and treat it as fixed. It isn’t.
We talk to so many investors that give half of their income to the government.
The Real Deferral Strategy
A bulldozer depreciates on paper and in real life. A private jet saves you money on taxes, then costs you a million and a half a year to fly. You can bonus depreciate a boat, a plane, a fleet of storage tanks. But when you sell those assets, they’re worth less than what you paid.
Real estate is the only depreciation vehicle that should be worth more when you sell it than when you bought it. It generates rental income on the way up. That’s why J19 focuses on multifamily.
One thing to understand before we go further: this is tax deferral, not tax elimination. When you sell a depreciated asset, you face recapture at 25%. That’s lower than the 37% you deferred, so you gain on the spread.
But the real advantage is what you do with the money in the meantime. Reinvest it. Compound it. Build something. Make your money work for you before you let it work for the government.
Depreciation and Cost Segregation
Depreciation is a paper loss. You deduct the declining value of an asset against real income even though no cash left your pocket. The IRS assigns every asset a useful life. Trucks and equipment: 5–7 years. Apartment buildings: 27.5 years.
That 27.5-year schedule spreads the benefit thin. Cost segregation changes the math.
An apartment building isn’t one asset. It’s hundreds. Hot water heaters, HVAC units, cabinets, wiring, plumbing, flooring, fixtures. A cost segregation study breaks the property into its component parts, each with its own depreciation schedule. Typically, 30–40% of a property’s value lands on schedules shorter than 20 years.
That matters because any asset with a schedule of 20 years or less qualifies for bonus depreciation, which lets you deduct the full value of an asset in the very first year of ownership. Once a temporary provision, 100% bonus depreciation is now permanent under the Big Beautiful Bill.
Here’s what that looks like. We buy a $10 million apartment complex. A million is land, which isn’t depreciable. Of the remaining $9 million, a cost seg study reclassifies $3 million onto sub-20-year schedules. We take $3 million in depreciation losses the year we buy it.
If J19 earned $3 million that year, taxable income is zero. And that’s what we do for you; we match all of J19’s income with offsetting depreciation inside our High Yield Tax Deferred Fund.
The Bigger Picture
Let your investments grow tax deferred with J19. Stop paying taxes today on your distributions.