Question on Tax Deduction for rentals (2)

thanks for 东南风起 and 小小石头's help, here is my understanding (if this is wrong, it must be I misunderstood them, not their fault):

Rental Operating Loss = Rent - (martgage/interest+repair+Ad+Fees) - Depreciation

If your AGI > 150k, you can't claim any loss, but you can carry over to next year to offset your future profit (if you get one).
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Should you take depreciation if you AGI > 150k?

Someone say don't take it, because when you sell your house, the depreciation you took will be deducted from your cost, and make the profit larger. Since your AGI > 150k and you can NOT deducted it anyway, you might as well not taking it, so by the time you sell your house, your paper profit will be less, hence you pay less tax.

This trigger my question:
Should you take the depreciation ANYWAY, even though you can not deduct the depreciation?

Somehow it seems like one should still do the depreciation, so you can accumulate more loss to offset future profit.

Yes the depreciation will be added back in when you sell the house, make the sell profit higher. But as long as the selling profit is < 500k, you still don't need to pay tax.

Does this theory make sense, or not?

所有跟帖： 

• you should take depreciation -海水是咸的- ♂ (462 bytes) () 04/14/2008 postreply 19:58:34

• Unforunately, you have to depreciate the house. However -东南风起- ♂ (492 bytes) () 04/14/2008 postreply 20:32:55

• I think you have too, no other choice -jy101- ♂ (0 bytes) () 04/14/2008 postreply 20:33:57

• The key is to make the loss to be 0 -skyport- ♂ (121 bytes) () 04/14/2008 postreply 21:16:19

• I think it makes sense to take depreciation each year -米袋袋- ♀ (514 bytes) () 04/14/2008 postreply 22:18:58

• Any un-allowed depr can be claim when selling the house -TraderZhou- ♂ (165 bytes) () 04/14/2008 postreply 23:03:52

• 回复：Question on Tax Deduction for rentals (2) -jaden- ♂ (322 bytes) () 04/14/2008 postreply 23:48:22

• Thanks everyone. -JR98- ♂ (0 bytes) () 04/15/2008 postreply 10:10:23