Answer
Jul 24, 2025 - 05:07 PM
Depreciation, all depreciation, I don't care what you're depreciating, it's your best friend and your worst enemy. Depreciation is not something you can elect into and out of. You're required to depreciate assets that qualify for them. So if I have a rental property, I have to depreciate it even if I know I'm going to sell it in the next two years. I still have to depreciate it. And when you depreciate an item and then you sell that item, you will recapture that depreciation. I like people to think of it very, very simply as it reduces your basis, which just means you're taking the deduction right now. If I bought a house for a million dollars, I took $10,000 of depreciation. My basis for the house is now $999,000 because I took that $10,000...or $100,000. Whatever. You get my point. $10,000 in depreciation. And so when I sell it, I have to already say what I deducted. You don't get to deduct things twice.
