Owning a rental property is considered a passive activity and subject to most of those rules (except for the ability to deduct $25,000 of losses from your other income if you actively participate.) However, renting a dwelling unit that you use as a home is not considered a passive activity and therefore not subject to those restrictions.
It is subject to other restrictions, namely, that you can only deduct the portion of your expenses directly related to the rental and some of your operating expenses and depreciation may be carried over to subsequent years rather than deducted in full.
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