Posted by Dave Murray, Ohio CPA on September 02, 2003 at 14:17:29:
You will deduct applicable expenses for the half you live in (half the interest, half the real estate tax) on Schedule A. Rental related expenses (depreciation on one-half the basis in the building, half the interest and half the tax, half the insurance, and repairs related to the rental side only) on Schedule E. If the rent received exceeds the expenses, you have additional taxable income. If expenses exceed income, you have a rental loss, which may or may not be deductible against your other income, depending on your adjusted gross income. I hope this helps.