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Publication 17

Not Rented for Profit(p68)

If you do not rent your property to make a profit, you can deduct your rental expenses only up to the amount of your rental income. You cannot deduct a loss or carry forward to the next year any rental expenses that are more than your rental income for the year. For more information about the rules for an activity not engaged in for profit, see Not-for-Profit Activities in chapter 1 of Publication 535.
At the time this publication went to print, Congress was considering legislation that would extend the deductions for state and local real estate taxes and a net disaster loss from Form 4684, if you do not itemize your deductions. To find out if this legislation was enacted, and for more details, see Publication 527 or go to

Where to report.(p68)

Report your not-for-profit rental income on Form 1040, line 21. You can include your mortgage interest and any qualified mortgage insurance premiums (if you use the property as your main home or second home), real estate taxes, and casualty losses on the appropriate lines of Form 1040, Schedule A, if you itemize your deductions.
If you itemize, claim your other rental expenses, subject to the rules explained in chapter 1 of Publication 535, as miscellaneous itemized deductions on Form 1040, Schedule A, line 23. You can deduct these expenses only if they, together with certain other miscellaneous itemized deductions, total more than 2% of your adjusted gross income.