I owned a studio in California and had to move to another state because of work and had to find an apartment to rent in the other state. A year ago i decided to rent out my studio in CA and earned a small amount of rental income but the amount of rental income was always less than the rent i had to pay in the other state. Do I still need to pay tax on the rental income i earned from CA? I read publication 527 from the IRS website to mean that i can reduce my rental income by "rents for other leasehold property used for rental purposes." I understand that the rents i paid for the apartment in the other state was not entirely for rental purposes, but i technically did not make any net profits from my studio in CA because I ended up paying more on my own rent. I did not take any deduction (property tax or mortgage) on the studio in CA. Thank you so much.
