Ok ... here is the rub ... OIH expenses can only be taken against a non passive business income reported on a Sch C but rentals are passive income reported on a Sch E so you cannot take them.
If you run the rentals as a B&B or a motel then you would report it on a Sch C and pay SE taxes on the profits and then you could deduct the OIH but only if you run at a profit.
This is a case of having your cake and eating it too ... since you don't pay SE taxes on the rentals so you don't get the deduction.
