if he does, it does not make sense to 少报 depreciation (as he has to pay more tax now in exchange for low capital gain tax later - who knows what will be the capital gain tax rate later? - or he might want to convert back the same property to primary home some time later. Or maybe he just loves to pay more tax now!)
If he does not have net rent profit before depreciation (if he has a big mortgage, that will be the case) , and if his income bracket (MAGI) is over 150K, then the depreciation can not be used for saving tax for the year, it will only be allowed to carry over into the future. That is usually the situation that preople want to 少报.
However, in theory, the only way to 少报 depreciation is to lower the starting cost base. This has limit too because you have to prorate the land/improvement value based on some acceptable methods - like county appraisal.
Once the depreciation starts, you normally can not change it (unless there is a major change in property). Every year, the ratio is 3.636% (starting from 2nd year, 1st year is prorated depending on date in service).
This ratio of 3.636% is fixed.
So if you DON'T take depreciation or 少报 depreciation (using a lower ratio), IRS still regards as if you are taking 3.636% - and it will calculate the final capital gain based on what the rules says, not what you reported.
The net effect is that you could (partially) lose and waste some depreciation benefit.
