[quote=skerzz]The majority of W-2 workers that own rental property in California generally will not benefit from depreciation deductions (losses on rental properties). I won’t go into all the specifics, but unless you are a full time real estate professional you won’t be able to offset ordinary income with passive rental losses. There is an exception to this rule based on income limitations — however, those that own rentals in SoCal or the Bay Area are likely making too much money to realize the benefit.[/quote]
Ding ding ding…..
BUT, I think it does mean you can almost get into a situation in which your effective rental income is $0/year at least on paper in the short/mid term until you actually need to deal with it… It does end up coming back and biting your eventually.. but hopefully by that time, you have little/no W2 income so you’re in a lower bracket at that point and/or you’re dead by then. Or you keep rolling and rolling it over…
At least that’s my plan (hopefully not the dead part)…
