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likecool21
New Member

Any downside to declare rental property depreciation?

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?

 

Thanks!

1 Reply
Critter-3
Level 15

Any downside to declare rental 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.  

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