My rental activity is active participation and knocks down my other taxable income even when I show a loss on my rental income. The more rental loss I show the more my taxable income drops. I am currently showing a loss without yet adding assets that will be depreciated. What are the pros and cons when I add the rental assets of taking larger depreciation expenses thru special deprecation options (like 179, bonus, etc. ) and continuing to knock down my other taxable income verses depreciating the assets over time. Am I not seeing something in the future that will come back to bite me? I understand the concept of if you know you will later show rental profits you will want to have the depreciation expenses to knock down your taxable rental income. But am I not seeing something else that makes what I am doing not the best decision. Because as I watch my refund get larger, it seems good to keep added and taking the largest depreciation expenses I qualify for but that may not be the best decision in the long run.
Any thoughts would be appreciated. Thanks!!!
