I know on my rentals I try to keep the depreciation as low as possible. There are those who have the impression that depreciation is a permanent deduction. It is not. When you sell the property, all prior depreciation is required to be recaptured and taxed in the year of the sale. Two things about recaptured depreciation.
1) While taxation of recaptured depreciation is presently capped at at a maximum of 25%, that recaptured depreciation adds to your AGI and therefore has the potential to bump you into the next higher tax bracket.
2) Recaptured depreciation is taxed as "ordinary income" instead of the higher capital gains rate, up to a max of 25%. Of course, your "gain" on the sale still gets taxed at the capital gains tax rate. So if the increased AGI keeps your tax bracket below 24%, you don't really "notice" anything. Otherwise, you may notice it on "other" ordinary income with the jump from the 24% bracket to the 32% bracket.
Of course, all that depends on "the numbers" in the tax year you sell, and it's darn near impossible to even have the slightest clue what those numbers will be either.
