Thank you! I might not have made myself understood. I owned the studio in CA myself, and I had to rent it out because I moved to another state (GA) and had to rent an apartment in GA. The rent I paid for the the apartment in GA was greater than the rental income I earned from CA (taking into account other rental related expenses such as management fees), so on a "net" basis I didn't have a profit.
It seems to me that the right way is to report the rental income from the studio in CA and also include the rents I paid for the apartment in GA as expenses to offset the rental income. So if i ended up in a "loss" because my current rent expense is greater than the rent income from my CA studio, i should not pay tax. Thanks!
