If you rent out property, you can take lots more deductions than you can with your personal home. Money you spend to insure your house, for instance, is a personal expense that you can't write off. When you spend money to insure a rental or other investment property, it's a business expense, which makes it deductible.
Pretty much any money you spend on your investment property is tax deductible, including mortgage interest, property insurance, property taxes, repairs and maintenance. You can claim most expenses the year you spend the money, but you have to depreciate property improvements over years. Patching a hole in the roof, for example, is a deductible repair, but replacing the roof is a depreciable expense. If you have to take out more insurance to cover improvements, your premiums are still immediately deductible.
If you get some personal use out of your investment property, such as a vacation home you rent out most of the year, you can't deduct as much. If for example you use the home three months out of the year, you can only claim three-quarters of the insurance and other expenses on your taxes. What counts is whether the property's available for rent. You can't write off expenses for your reserved time, even if you don't get around to staying there.
If your property insurance and other expenses push your property into the red, you may not be able to deduct the loss from your other income. The IRS classes rental property as a passive activity, and you can't write off passive losses against "active" income such as a day job. Instead, you roll it over to next year and deduct it then. If you're active in managing a rental, on the other hand, you can write off up to $25,000 against active income, no more.
If your investment activity is a full-time business, you report your income and expenses on Schedule C. Otherwise you use Schedule E. Keep records of your insurance payments and everything else you spent on the house so that you can justify your tax deductions if the IRS ever audits you. Normally the IRS only gets to look back three years for an audit so you don't have to keep insurance records longer than that.
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