@Carl wrote:
Depreciation deductions for federal income tax purposes have absolutely no impact on tangible personal property taxes levied by state or local taxing authorities.
Exactly my point. They do have an impact on the "bottom line" though.
First, I do not believe you took into account the fact that any tangible personal property taxes levied and paid would be deductible on Schedule E. The language in your post suggests that such taxes paid are simply lost, which is incorrect.
Further, whether or not a jurisdiction has a tangible personal property tax for personal property used in a rental is irrelevant for the purposes of deciding whether or not to claim depreciation deductions since the personal property tax will be imposed whether the deduction is claimed or not.
In addition, as you are already aware, depreciation is not "optional", so the decision does not need to be made; if the deduction deduction is not taken, there will be recapture upon a sale (at a gain) based upon the amount of depreciation that could have been taken.
