Depreciation Lowers AGI?
I hope this is an easy question with a simple answer. Thnaks in advance for any help.
Does depreciaiton on rental property, to the extent that it exceeds passive income, lower your Adjusted Gross Income (AGI) or does it simply lower your taxable income?
This is important to me as I need to get my AGI down in order to qualify for certain tax benefits. Depreciation that lowers my taxes is nice, but depreciation that lowers my AGI (and taxes) is better!
[ Edited by venator64 on Date 01/05/2006 ]
[ Edited by venator64 on Date 01/06/2006 ]
venator64,
Quote:"Property placed in service after 1998. Use the same convention and recovery period used for the regular tax. For section 1250 property, use the straight line method." I did find this on the IRS website. I was not aware of this AMT depreciation schedule provision for property placed in service after 1998. You appear to be correct. If your property was initially placed in service in 1999 or later, then the AMT straight line depreciation schedule for your residential rental property is the same as the General Depreciation Schedule.
Property originally placed in service before 1999 will use a 40 year recovery period for AMT calculations.
I stand corrected. Thank you for bringing this to my attention.