Can I zero out the property depreciation amount on my rental property (which doesn't help my bottom line this year) and carry it forward to a future year?

[nnachun]

I don't want to claim this year's nearly $5K rental property depreciation (which doesn't help me) if it can either be added to a future year's depreciation or, even better, be subtracted from my capital gains when I sell the property. Why use it now just to lose it?

Also a Turbo Tax question: would my zeroing out this amount screw up my depreciation schedule as calculated by TT in subsequent year(s)? The whole reason I use TT is that it calculates these things for me.

[Anita01]

You should not just leave it out.  When you sell the property, you will be taxed on the amount of depreciation you took or COULD HAVE TAKEN so there's no incentive to leave it out.  The passive loss carryforward will carry it forward until you sell the property, at which point the total passive loss carryforward  can be used to reduce the tax you owe on any other form of income on your return.

[nnachun]

Thanks for your response. Am unclear, however, if a passive loss carryforward applies when a profit from rental property is shown, but other deductions (eg medical) reduce gross income to a large minus. Is my unneeded 'rental property depreciation' simply a give-away in this case?

[Anita01]

There is no passive loss carryforward, at least for this year, if the rental property is operating with a profit. You will have to pay to recapture the depreciation when you sell the [property though, whether you take it this year or not.  So, your rental expenses don't help you this year.

In another vein,itemized deductions like medical expenses cannot create a negative net income, so your gross income will just be reduced to zero for the year.  Only a casualty loss can create a Net Operating loss for the year, and that will indeed carry forward until future years, otherwise all other itemized deductions can be taken until your income from all sources is reduced to zero.