Passive loss being limited by passive income (Airbnb rental) - so should I still take depreciation?

Forum|Forum|2 years ago
March 8, 2024
2 replies
0 views

Subject says it all...

My passive loss is being limited to ZERO (matches the passive income) - so should I NOT take depreciation expense? (I don't need that expense to reach zero passive income.) I don't want to have to pay taxes on that depreciation if/when we sell the home for a profit if I am not getting a tax benefit now.

Thanks...

Anonymous_

Employee

Did you use the rental as a residence (i.e., used the property for personal purposes more than the greater of 14 days or 10% of the days rented at fair rental value)?

You might very well be running into the vacation home loss limitation (Section 280A) and not the passive activity loss limitation (Section 469).

Mike9241

if depreciation is allowed you must take it. if you don't when you sell the property your gain will include the depreciation you should have taken. You will end up paying taxes on a deduction you never took. This can be corrected but it's a nuisance