You cannot deduct the expenses without the matching income. You would need to mark it as rental property on a schedule E and prorate the part of the house and expenses. So if you rented out just your basement for the first 10 months of the year, and your total house is 2,000 sq. ft. with the basement taking up 1,000 sq. ft. of that space, then you would allocate half the expenses to the rental and include all of the income.
**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"
