Since I have to breakdown my non-deductible rental property expenses into operating expenses and depreciation, do I need to do this proportionally based on the percentage of losses I was not able to claim? For example, using round numbers, assume I had 60K prior year expenses and 40k revenue. Because my MAGI exceeded 150 K I was only able to deduct the equivalent of my rental income, (i.e.,40K ). I understand that to mean I have 20k in non-deductible expenses from that prior year. To determine how much of that 20k is attributed to operating expense vs depreciation I would divide my 20K non deductible loss by my total 60K expenses to get a loss percentage of 33%. I would then multiple my total operating expenses by 33% to get my non-deductible operating expenses and do the same for my depreciation to calculate my non-deductible depreciation. Is this method correct?
