I see a fair number of folks who mistakenly believe that depreciation is a permanent deduction. It is not. Whenever you sell the property, you are required to recapture all depreciation taken and pay taxes on it in the year of the sale. Two things to keep in mind about that.
1) Recaptured depreciation is added to, and therefore increases your AGI in the year of recapture.
2) There is a potential that the increased AGI from depreciation recapture can bump you into the next higher tax bracket.
I myself prefer to keep my depreciation deduction as low as a legally can, specifically for the two reasons listed above.
