Any downside to declare rental property depreciation?

[likecool21]

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!

[Critter-3]

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.  

[papa281]

My income is too high to get any money off of my taxes for my rental property. What is the downside of not declaring the rental on my taxes. 

[Critter-3]

Listen carefully .... YOU MUST MUST MUST TAKE DEPRECIATION.  It is not an option.  Failure to take the required depreciation and banking the unused deduction for later will mean you will pay taxes on something you never got to deduct thus paying taxes on the amount twice. 

[MarilynG1]

If you're not allowed to claim a Rental Loss this year (due to your income), the loss is Carried Forward each year until you are able to claim the losses, or until you sell the property.

At that time, if you have not been able to claim Rental Losses over the years, you will have a large Capital Loss to take against the sale proceeds of the property.

Be sure that you indicated you 'actively participate' in your Rental Activity and that your investment is 'at risk'.  

Here's more info on Passive Activity and At-Risk Rules.

@papa281