No, you would not have to dispose of all your rental properties, just the specific one the losses are directly in connection with. With careful tax planning, you can choose when to best utilize losses on a property to minimize tax.
You are not required to take the depreciation deduction, however, when you do dispose of the property, you are required to recapture it - so if you do not claim it, you will still have to pay tax on it. Essentially the depreciation will be subtracted from your basis so if you do not have the offsetting deduction, you pay even more in taxes.
@schamrick
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