We don't get any rent money, but can we take any tax deductions like, Mortgage interest, monthly association fee, dishwasher replacement cost, some of the closing costs, etc. ? Yes and no, mostly no. You can deduct mortgage interest as an itemized expense as your second home, but that is it. This will ONLY be beneficial if your total itemized expenses are greater than your standard deduction. The rest of it is considered personal expenses since it is not a rental property. Since your daughter is living there rent free, this does not count as any type of rental property.
Is it possible to carry forward our loss to the next year ? No. This is not currently considered to be a rental property so there are no losses, instead it is personal use property so you cannot use any expenses incurred prior to it being rented out. What you will do is add the closing costs to the cost basis of the house when you do finally rent it and are deducting depreciation. The HOA fees will be deductible for the months you pay them when they property is rented. However, the fees you are paying now are not deductible at all, either now or in the future.
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