Enter the rent and the costs. See depreciation, whether the loss counts this year, federal + California tax, the cash you really keep, and what depreciation costs you when you sell. Numbers below are an example.
$
$
$
$
%
$
yrs
Cash you keep after tax
$0 /yr
Rent for the year$0
− Costs and interest$0
− Depreciation$0
what goes on Schedule E$0
Loss you can use this year$0
Loss carried forward used later, or when you sell$0
$0
$0
Cash before tax rent − costs − interest$0
Cash after tax principal payments not included$0
Estimate only, not tax advice. Full-year depreciation (the first year is a little less, mid-month). Your other income uses the standard deduction for brackets; California uses the same income and the 2025 schedule.
Depreciation added up$0
Federal tax on it (unrecaptured §1250, max 25%)$0
California tax on it (ordinary income)$0
Total owed back at sale, on depreciation alone$0
Owed whether you claimed the depreciation or not ("allowed or allowable"). Any loss carried forward is released at sale and lowers this. Price gain is taxed on top — see T222.
Common mistake: "I'll skip depreciation so I don't pay it back later." The IRS taxes the depreciation you could have taken when you sell, claimed or not. Skip it and you lose the deduction now and still pay the 25% later. Take it every year.
Next step
Thinking of selling? Compare sell-and-pay vs 1031 over 10–20 years: T222.
Going with 1031? Run the boot and the 45/180-day dates: T27.
Moving out of your home and not sure to rent or sell? T51.