assuming the answer to the 14day/10% of rental days question is yes.
there is a second question. "Was the property rented less than 15 days?" Any day rented to anyone at less than a fair rental price is considered a personal use day (not a rental day), Days rented to family members are personal use days unless fair rent is charged and it is their main home.
If you enter yes. the residence is a personal residence. rental income and expenses are not reported. Mortgage interest and taxes go on schedule A if a qaulified residence. Each currently has a limit as to deductibility.
Will the losses be carried over to the next year in this scenario? NO they are permanently gone
Will they be counted when selling the house? no
If you answer no, then expenses will be prorated (Turbo tax will do the prorations) with certain rules. the rental portion of interest and taxes is not limited to rental income. other expenses are subject to ordering rules with carryover allowed.
