Depreciation

 People often talk about the positive benefit of depreciation on taxes.  While there is no doubt that lowering your taxable basis can be smart financial planning, understanding how depreciation works can help utilize it in the best way.  First off most people are capped out on passive loss limitation rules, because the majority of taxpayers do not have passive income to offset the loss past the allowable limitation.  If you fall in this bucket understand that taking depreciation will not help in the near term, therefore don't budget for its benefit when purchasing a property.  Secondly, if you sell the property for a gain you will be subject to depreciation recapture on the depreciation you have offset against your tax bill.  So when calculating you long term gain for your next tax bill make sure to set aside depreciation recapture if/when it comes up.  This note provided by www.landlordstation.com, the best place on the web for Tenant Screening through its partnership with mySmartmove and TransUnion.