Depreciation for tax purposes

[Andrew Thomson]

Hi there, I'm unsure of the tax rules in USA but I'm familiar with them in Canada and I'm assuming they are similar with respect to depreciation (CCA in Canada). I'm relatively new (3 years) to the accounting world and starting to save up for potential investment in real estate. Many of our clients are real estate investors and I see two different strategies when it comes to claiming CCA. Some choose not to claim CCA, this a higher tax liability. They do this to avoid recapture (taxed at 100%) upon sale of the home. This means upon sale the only tax liability would be the capital gain. Others choose to claim CCA each year, which means they have some tax savings and could use those savings for improvements, maintenance, or other investments. However, upon sale of the home they would be hit with recapture and a capital gain which means the tax man hits hard. I'm looking to hear what some of the bigger pockets community prefers when it comes to your own investment properties? Advantages, disadvantages, etc. Thanks! Andy