You are allowed to deduct ordinary and necessary expenses required to manage, conserve, or maintain property that you rent to others. You're allowed to deduct these expenses if your property is vacant, as long as you're trying to rent it.
Expenses must be deducted in the year they are paid. For example, if a pest-control company serviced your rental in 2019 but you didn't pay them until early 2020, you'd deduct that expense on your 2020 tax return.
Deductible expenses include, but are not limited to:
- Cleaning and cleaning supplies
- Maintenance and related supplies
- Repairs
- Utilities
- Insurance
- Travel to and from the property
- Management fees
- Legal and professional fees
- Commissions
- Taxes and tax return preparation
- Lease cancellation costs
- Advertising
- Real estate taxes
- Mortgage interest
Your home will be depreciated over its useful life rather than deducting your mortgage payment. Depreciation is calculated at the property value less the value of the land (land is not deprecable) spread over the useful life of the property. The original cost include the purchase of the property and capital improvements made to the property.
See IRS Publication 527 for more information.
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