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We bought a single family home and rented it out this May. Is there a limit on our gross AGI to claim the residential rental depreciation? (To be clear, this is the straight-line depreciation on residential rental that spans 27.5 years)
It would be nice to be able to claim the deduction on next year's tax return. Thanks.
1. Talk to a CPA
2. Look on IRS web site, they have good publications on this topic www.irs.gov
Generally, you cannot show a LOSS on rental property if your AGI is too high. That doesn't mean you can't depreciate and reduce your income from the rents. There are all kinds of specific rules around this so Talk to a CPA!
While the 'gold standard' is the IRS site, this link gives you a good summary. It ALSO shows just how incredibly complex these tax rules are, and why you MUST consult a good CPA when you own rental property. TurboTax® - Real Estate Tax and Rental Property
Not to be negative, but I can't imagine why anybody would purchase / invest in rental property before understanding these rules. How on earth did you calculate your ROI? Or worse yet, maybe you didn't.
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