Depreciation and Passive Losses

[Jon Fletcher]

I read a lot here about people having passive losses or paper losses once depreciation is factored in. But depreciation for a residential property is only 3.636% each year (27.5 years). I know this is a good problem to have, but my properties generate a return closer to 6% per year after expenses, so there is still taxable income. Am I missing something? 

[Natalie Kolodij]

Some properties do have income still on paper. 

A good tax pro will look at the various options you're allowed to use to set up initial depreciation- one may be more beneficl than the other. 

Also, cost segregation