I rent out a condo that I purchased two years ago. I make a small profit. It may be advantageous for me to depreciate the condo. This presumably will increase the capital gains that will occur when it is sold. My question: Does the IRS insist that depreciation is taken or can I choose not to depreciate it?
Does the IRS insist that depreciation is taken or can I choose not to depreciate it?
Yes, the IRS will tax you on depreciation recapture whether or not you actual claim the depreciation. According to this article:
not depreciating your property will not save you from the tax -- the IRS levies it on the depreciation that you should have claimed, whether or not you actually did.