I bought the rental property this year and have a loss $3500 which is not deductible because income is over $150,000. My other rental expenses exceed the rental in come so I don't need the depreciation
Yes, you are required to take depreciation, even though you income level forces a carryover of your loss. Whether you take it or not, you will have to recapture the amount of depreciation allowed or allowable upon the sale.
