If you have any personal use of a dwelling
unit (including a vacation home) that you rent, you must divide your expenses
between rental use and personal use.
If your
personal use of the dwelling unit is more than the greater of:
1.
14 days, or
2.
10% of the total days you rent it
to others at a fair rental price,
limitations
may apply to the rental expenses that you can deduct.
In general, your rental expenses, including
depreciation and insurance, will be no more than your total expenses multiplied
by a fraction; the numerator of which is the total number of day actually
rented at a fair rental price and the denominator of which is the total number
of days the dwelling unit is used. Days that the dwelling unit was available
for rental, but not actually rented do not count.
Only your rental expenses may be deducted on
Schedule E (Form 1040). Note that the non-rental portion of mortgage interest and real estate taxes may be deducted in Schedule A (Form 1040) if you
itemize deductions.
Detailed information about rental income and
expenses can be found in IRS
Pub. 527 Residential Rental Property.
This TurboTax article will guide you through the
specifics of Where do
I enter income and expenses from a rental property?
