The method presented in this work reduces the frequency of virtual objects incorrectly occluding real-world objects in Augmented Reality (AR) applications. Current AR rendering methods cannot properly represent occlusion between real and virtual objects because the objects are not represented in a common coordinate system. These occlusion errors can lead users to have an incorrect perception of the environment around them when using an AR application, namely not knowing a real-world object is present due to a virtual object incorrectly occluding it and incorrect perception of depth or distance by the user due to incorrect occlusions. The authors of this paper present a method that brings both real-world and virtual objects into a common coordinate system so that distant virtual objects do not obscure nearby real-world objects in an AR application. This method captures and processes RGB-D data in real-time, allowing the method to be used in a variety of environments and scenarios. A case study shows the effectiveness and usability of the proposed method to correctly occlude real-world and virtual objects and provide a more realistic representation of the combined real and virtual environments in an AR application. The results of the case study show that the proposed method can detect at least 20 real-world objects with potential to be incorrectly occluded while processing and fixing occlusion errors at least 5 times per second.