In 2021 my rental property calculates to a big negative income - the deductions (property tax, insurance, management fee, mortgage interest etc) can already offset the rental income. So technically I don't need to declare property depreciation to avoid paying any taxes. Turbotax still calculated depreciation by itself so there is a huge negative income for my rental property. I wonder if there is any downside for declaring property depreciation? If there is any negative impact should I not declare property depreciation?
OK ... there is no decision to make ... you MUST depreciate the property. Failure to do so will force you to pay a lot more in taxes when you sell the property in the future.
If the property runs at a loss due to the depreciation that is normal. And if the loss is not allowed currently it is carried forward to be used later.