Taking Property depreciation for Tax filing

[Kaiser Saeed]

Hi - I have been renting my property for about 18 months so I am kind of new to this.

I am looking for some guidence if it is a good idea to take my rental property’s depreciation for filing taxes? From some reading I did, it’s 3.363% of the improvements (i. e., not including the land value) and depreciate it based on 27.5 years. Oh and this is In Texas. But what confused me is that there is 25% tax payback required if I were to sell that property. So, is it beneficial to take that depreciation for tax purposes?

Much thanks,

Kaiser

[Bill B.]

You have to take the depreciation or the IRS will just pretend you took it And tax you anyway when you sell. 

That 25% recapture tax is just another reason you should generally do a 1031 exchange or hold it until you die.