I have rental property for which I have a loss for 2010. I cannot deduct this loss due to passive activity loss limitations (and have no other passive activities).

I am also subject to the AMT. My current tax software takes the deprecation from my Schedule E (and related forms) and calculates the AMT depreciation and enters the difference on my form 6251. I end up paying AMT on this amount--even though I do not actually get any tax benefit from this depreciation due to the passive activity loss limitations.

Question 1. Is this correct?

Question 2. Can I just decline to take the depreciation on my Schedule E (which makes the AMT depreciation go away!)?

Question 3. Would this have any negative long term implications (e.g., when I sell the rental unit) other than the imputed depreciation that I might regret?