When to Start Depreciating Properties? Pros and Cons?

[Bobby Balow]

Good morning all! Had a quick question about when to depreciate SFH rentals which we are currently buying and holding long term.

My wife and I are on contract for our 4th property (2 with a mortgage) and we've been asked by our CPA if we want to depreciate our properties on our taxes.

My question is when is a good time to consider depreciating rentals or even our primary residence (which we have 1/3rd of the house as an Air bnb)? Things that we are trying to consider are:

• The ability to obtain a loan in the future (lower AGI from depreciation might hurt us) and recapture taxes

I figured that if we sell an investment property, we would likely reinvest via a 1031 to defer our taxes, but would love some opinions on others that have gone through this and might be able to share their experiences for setting up a good foundation.

Thanks so much in advance! Cheers!

[Natalie Kolodij]

This is an easy answer- 

You start depreciating it as soon as it's in service as a rental

It's not something you get asked if you WANT to do

You should find a new tax professional. 

Depreciation is not optional. It's allowed or allowable which means if you don't depreciate it...when you sell...you're taxed as though you did.