MsTabbyKats Posted April 11, 2013 Report Share Posted April 11, 2013 Very basic question.... Potential new client: Started renting out an apt in 2011. Depreciation wasn't taken. He told me the preparer said it was better than way because it would be costly in the future. So....the question...does it have to be reported? One client is an attorney at IRS and has 2 rental properties. She didn't want me to take depreciation (I forget why...I think she just wanted to be as cut and dry as possible) but she asked "around the office"...and her colleagues told her to take it. Note...she is an attorney with the IRS but in HR. Anyone have a definitive answer. I really don't want to amend my potential clients 2011 for other reasons.....I'm trying to avoid it. Quote Link to comment Share on other sites More sharing options...
Guest Taxed Posted April 11, 2013 Report Share Posted April 11, 2013 Very basic answer. You don't have to take depreciation on a rental property if you don't want to deduct it on Sch E. HOWEVER when you figure capital gains on disposition of that asset, you have to add back depreciation EVEN IF NOT TAKEN. That is the catch so you might as well take the depreciation. Quote Link to comment Share on other sites More sharing options...
MsTabbyKats Posted April 11, 2013 Author Report Share Posted April 11, 2013 Thank you.... Memory is coming back...I think this is what "my lawyer client" found out too...way back. It's a concept that doesn't come up too often...... Quote Link to comment Share on other sites More sharing options...
mcb39 Posted April 12, 2013 Report Share Posted April 12, 2013 With depreciation, the rule is : Allowed or Allowable. You don't HAVE to take it, but the repercussions on sale are the same. Quote Link to comment Share on other sites More sharing options...
Gail in Virginia Posted April 12, 2013 Report Share Posted April 12, 2013 Agree. Depreciation is always allowed or allowable. Quote Link to comment Share on other sites More sharing options...
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