Filing for Depreciation will be a costly mistake for me atm? 24h

[John Jones]

Hello.  In trying to help my mom after my dad passed away Christmas, I rented my place out.  Having never done this, and rushed by the deadline to file taxes, I'm confused on some points.  On advise pages it's suggested to take the amount the home depreciates into account.  However, I came across a page with how doing so could be a costly mistake for some depending on their tax bracket.  This page can be googled by searching for "Property Depreciation: Why the Tax Benefits Could Come Back to Bite You" - shows stressed guy in front of laptop. -  A home depreciates every year.   So this depreciation can be counted as costs out of any income made to offset those losses.  

I'm in the low 15% tax bracket atm.  In figuring out my taxes, I seems I only owe a few hundred dollars.  Let's pretend $500 for now.   The article points out that if the home is sold later, the IRS wants this paid back in recapture fees at standard rate of 25%, regardless of if the person is in the 15%, 25%, 28% or whatever bracket.  So it's point seems to be that people in a low tax bracket could lose more money in the long run.  But some people who don't file the depreciation also lose money if they are in higher tax brackets.  It all depends on what they bring in that year.  If I understand it, I think I'm going to lose money down the road by claiming depreciation.  But was hoping someone more knowledgeable could confirm what I think is true or not before I attempt to file taxes by tomorrow.

The web gives 3 tax bracket examples of 15%, 25% and 28%.  Example:  "Dave buys a single family rental for $100,000 and determines that his improvement ratio is 90%. Therefore, his improvements are valued at $90,000 (0.90 x $100,000) and will be his cost basis for depreciation. Dave’s annual depreciation will be $3,723 ($90,000/27.5).   Assuming that his annual depreciation brings his Net Operating Income (NOI) to $0.00 each year, Dave saves $491 annually (0.15 x $3,723). If Dave holds the property for ten years and then sells it, his ten years’ worth of depreciation will have saved him $4,910, a solid savings indeed.  But what Dave doesn’t realize, likely because Dave didn’t consult with a real estate savvy accountant, is that Dave has to repay the total depreciation taken at a 25% rate. The total amount of depreciation Dave took over ten years was $32,730, meaning his recapture taxes amount to $8,183. Annual depreciation actually costs Dave $3,273."

*** It then gives 25% example and shows how that person doesn't really lose and so on.  Going to the site to see their chart makes it easier to understand.  Anyway, in my case, my depreciation is higher than the example..   Yet due to the the fact I didn't make that much this year, in 15% bracket, I only owe a few hundred.   Therefore I could easily be tempted to wipe out what I owe by filing the depreciation so that I would wind up owing zero taxes.   But if the article is correct, and I go to sell the home later, I would owe 25% of whatever depreciation I took this year later on down the road.  If we use the above example and pretend I own Dave's place, and then sold it, I'd owe $8,183 for this year to be paid in the future as recapture fees...   But I just said I only owe about $500 in taxes this year.   So for me, that would mean I'd actually lose $8,183 - $500 = I would lose $7,683 when I go to sell the place years later.   To top it off, I don't even know if there's any cumulative or recurring fees on this.  

Now that might not be a bad thing if I made enough so that I owed more than $7,683 in taxes this year, because it would just even out later.   IT seems hard to believe, but again, it looks like If I file depreciation, I will lose big time.  Can anyone confirm I'm looking at this the right way?   Because most people are (hopefully) in a better position, with a rental and alternate income.  They make more money and therefore take the depreciation etc.  But this is not my case this year.  

It's the 16th, and I only have until tomorrow to file taxes.  The only income is the rental right now.  With no suggestions, I will likely just not take the deprecation because I think the article is correct.  And that's scary to think I'd lose nearly 8 grand.   But any help, ideas or guidance would be greatly appreciated since I'm totally new to what I'm trying to do here.  Thanks.

https://www.biggerpockets.com/renewsblog/2015/08/23/depreciation-bite/