Bought a house in the end of last year (2015), rent it out 6 months. Because the previous owner want to live a while before move out. So I rent it for them, during this time, I have to rental a place to live before I move in, is my rental fee deducted or not ?
Example, I charge previous owner 1500 dollars one month, but I have to rental a place to live ( pay 1000 dollars ). So my pure gain is actually, 500 dollars.
Is that expense deducted ?
Amounts you pay on rent to live are just living expenses and are not deductible, no matter the reason.
Secondly, I would simply ignore the rental arrangement on your new house. Typically, this is a short term arrangement and the old owner pays your mortgage until you move out. There are all kinds of tax complications if you report the home as a rental, especially if you report it as a rental before moving in as your personal home. So I would just ignore the rental income -- don't report the income, and don't deduct expenses. Just pretend it never happened.