There are no restrictions on any method of depreciation. However, the fund investor will likely get no year one benefit. The basis in an OZ fund is zero if capital gains being deferred when invested. This means that any loss reported, including depreciation, would be suspended until there is income to offset the loss or additional capital is contributed. Because we are talking persona property, we cannot increase the basis by debt, unless investor accepts recourse liability. Even if we have basis, the losses will be subject to passive loss limits. Make your life easier and just take regular depreciation
