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Rental deduction

I have a home in PA that was my primary home until July 2010. I moved to CA and now live in an apartment. For 2011, my home in PA was rented for 6 months. Then it was vacant for 5 months at which point in time I listed it for sale. It didn't sell. In mid Dec 2011, I found a tenant and rented it out for 12 months.

Since the original tenants trashed the place, I spent a lot of money doing repair work on the house. Consequently, I had a net income loss of -28K (including 8K for depreciation). However, given that it was rented for only 6.5 months, I can only deduct about 18K of the expenses this year and carry the 10K for next year. Is it possible to deduct the mortgage interest + property taxes + mortgage insurance premium only for the 5.5 months it was vacant and listed for sale in Schedule A? Say this amount is 5K. I deduct 5K in Schedule A and only carry over 5K (instead of 10K) into next year?

Or can I just treat this as my "main" home and just deduct all the mortgage interest + property taxes + mortgage insurance premium in Schedule A and not consider these as business expenses in Schedule E? In Schedule E, I just report total rent + repair work / damage expenses arising just from the rental portion? If so, then I shouldn't be depreciating the property right?

Thank you for any help.

Reply to
pallav
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If, during that 5 months, it was being repaired, I might make a case for it still being considered rental property. When I moved out and listed the place for rent, that listing was the date I used when deciding when it became a rental. During periods between tenants, it's still a rental.

Reply to
JoeTaxpayer

"pallav" wrote

Renters can be rough on property.

I'd count the entire property as rental for the full year. The fact that you didn't have any renters in there doesn't not make it rental property. All expenses would be allowed. Remember though that some of the work you did to "repair" the damage might have rose up to the level of an improvement and need to be capitalized and depreciated. Some of it would be true repairs and deductible in the year paid.

Reply to
paulthomascpa

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