How do tax deductions work when you rent out your primary house?

MrNaytush: How do tax deductions work when you rent out your primary house?
I’m going to rent out my primary (and only) house for few years, as I’m moving for work to a different state.
How do i deduct the mortgage interest paid and property tax? Do I deduct it from my income tax, as usual? Do I subtract it from the rent income to reduce (or almost eliminate) taxes on the rental income? or maybe both?!

Thanks.

Answers and Views:

Answer by Patricia C
You deduct interest and property tax as you normally do. You report rental income as a separate transaction.
I suggest you have a CPA do your taxes because it can get very tricky and the IRS will come down hard on you if you do it incorrectly.

Answer by 123456789
Instead of deducting mortgage interest and property taxes on Schedule A, itemized deduction, you would now be deducting them on Schedule E, along with the reporting of income collected, and ordinary, necessary expenses for the upkeep of your new rental property.

Answer by Judy
You’ll fill out a schedule E showing the rental income and associated expenses. Interest and property tax will go on the schedule E rather than being personal itemized deductions on schedule A like you did when it was your primary residence.

Answer by Truth B
Check out this great list of tax advantages. As a landlord I use turbotax premier and it asks you all the questions and creates Schedule E for you. There are some great tax benefits to be had. Some that change depending on if you manage the property yourself or pay a company to do it. If you are managing it yourself, even with having a friend be the local contact, you can write off the travel back to where the house is located.