Rental Property Depreciation Tax Question

[Chris Waugaman]

Hi All- 

So I purchased my first rental property 2 years old. New construction townhome. My question is about Tax write offs. So my account has told me to not take the yearly depreciation on the property for my taxes but to wait until the day I sell the property and then I will get the savings on the Capital Gains profits from the sale. That’s the general gist of it. Trying to find out if this is the right way to go? Do most investors take this route or do they take the depreciation on their yearly taxes. Thank you in advance. 

[Ashish Acharya]

Quote from @Chris Waugaman:

Hi All- 

So I purchased my first rental property 2 years old. New construction townhome. My question is about Tax write offs. So my account has told me to not take the yearly depreciation on the property for my taxes but to wait until the day I sell the property and then I will get the savings on the Capital Gains profits from the sale. That’s the general gist of it. Trying to find out if this is the right way to go? Do most investors take this route or do they take the depreciation on their yearly taxes. Thank you in advance. 

 That is 100% incorrect. It is not an option to take deprecation (you have to take it). You will have to file form 3115 when you have to correct the depreciation you have taken, and it will be very expensive to do that.