Haven't been claiming depreciation

[Hamilton Yu]

What can I do if I did not claim depreciation on some years of my rental property ownership?

Is there ever any benefit to not claiming depreciation?

If I plan to own a property very long term, would it be more beneficial to save the depreciation deduction for years in which the rental properties generate higher than usual income?

Thank you

[Michael Plaks]

@Hamilton Yu

@Jason D. and @Wayne Brooks are right: depreciation is not optional. Because of that, when you sell, you are paying taxes as if you took depreciation every year, whether you did or did not.

Since you missed it for some years, you're supposed to catch up in the year when you discovered the error. In other words, you need to do it on your next tax return. 

Once you realized there was an error, you cannot sit on that error waiting for the optimal year in the future to catch up. At least not legally. Of course, it is up to you to be honest as to when you found the error.

The catch-up procedure involves recalculating depreciation as if it was claimed properly, comparing this number with whatever you did claim, and then deducting the difference. Sounds simple, but it is not. This calculation needs to be reported on a special complicated Form 3115, and not many people know how to complete it. Even some CPAs do not know it if they are not real estate specialists. So I recommend professional help.

You cannot simply amend past tax returns for missed depreciation.