Generating Large Depreciation Expenses With Positive Cash Flow

[Bryan Hancock]

We're doing some planning for next year to reduce taxes and I was hoping some of our more astute investors could give me some ideas about generating large depreciation expenses to reduce passive income.  The following is desirable, but not necessary if some elements are hard to get all in one type of project or strategy:

• Large depreciation expenses in early years.  A chattel appraisal or cost segregation study comes to mind, but there are probably other ways to do this
• Preferably something I can invest in passively and avoid management headaches
• Hopefully decent real yields, but something that avoids negative cash flow for sure

Any ideas?  I was thinking of small apartments where we can do cost segregation and later exchange to larger buildings and repeat the process.  I am not sure if the chattel becomes part of the deferral during a 1031 so that may not work.  

Any ideas?  Note that the project does not have to be real estate related.