You can also deduct utilities, hazard insurance, condo fees, etc.. There are certain rules about rental property that complicate things a bit. First, while you get to deduct depreciation on a yearly basis, when you sell the property, you are required (in most cases) to pay tax on the depreciation that you took while you owned the property. As always, there are exceptions to that, but that is the general rule. Effectively, this makes depreciation less of a free lunch than it might first appear. Second, you must be an "active participant" in the real estate activity" to deduct losses from rental property. Third, unless you are a real estate professional, you are limited to deducting 25,000 per year in real estate losses (12,500 if married filing separately).
However, any losses than you can't deduct in a given year are considered passive activity losses than can be carried over to future tax years.
See Publication 527 for more information:
<a rel="nofollow" target="_blank" href="
https://www.irs.gov/pub/irs-pdf/p527.pdf">https://www.irs.gov/pub/irs-pdf/p527.pdf</a>
