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While Ira is right on point, I would like to clarify something. The actual deduction for depreciation is not limited, but the overall net loss is limited.

Example -

You own a rental unit and clear 120K per year. Your income from the rental is $10,000 per year with expenses before depreciation of $3,000. You still get to deduct the depreciation against rental revenue. Your total net loss will be adjusted to reflect the disallowed portion.

Again, there is not an income limit with regards to depreciation. The income limit is figured against net loss.

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