Hello all! I have a somewhat gnarly situation with a rental property. My wife and I lived in a house in Maryland for 13 years, then moved to California in August of 2014. We had tenants living in the house from August 2014 to July 5, 2015. We then put some work into the house, put it on the market and sold it; closing date was October 26, 2015. So, because we lived in it for more than 3 of the last 5 years, we won't owe capital gains taxes on the sale (our profit was under $250K). I'm now trying to figure out what I can and can't list as losses on my Schedule E for 2015.

Some things are obvious: I can list repairs and maintenance we did while the tenants were in the house. But there's also:

*Work we had done after the tenants moved out but before we listed the house
*Work we had done after the house was under contract but before we closed, because it was requested by the buyer

This was work that falls under the heading of "repairs and maintenance" rather than "improvements" -- fixing some wonky electrical work, reinforcing the wobbly back deck, repairing and resealing scuffed hardwood floors, stuff like that. Can I deduct any of these costs? How about the cost of the electric/gas bill for the period when the house was vacant?

Next is the question of expenses that can't easily be assigned to a precise time period -- mortgage interest, property taxes, homeowner's insurance, and the water bill. For 2014, we deducted on schedule E a percentage of these equal to the percentage of the time the house was a rental. I assume we'll do something similar for 2015, but I'm not sure what the percentage should be. 50%, because the house was a rental for six months out of the year? 60%, because we owned it for ten months and rented it for six? Something else?

Then there's the issue of depreciation. My accountant put depreciation on Schedule E for 2014. I know depreciation lowers your basis and ultimately increases the capital gains tax you'd have to pay once you sell the asset. But since we won't have to pay capital gains on the home sale, this feels a little like getting something for nothing. Can I list depreciation for 2015? Was it a mistake to do it for 2014?

Finally, there's the question of costs directly related to the sale of the house -- realtors fees, property transfer taxes, etc. It seems like these might be count as a cost associated with the rental home, and so potentially deductable, but at the same time since I'm not paying capital gains tax on the sale of the house, my bet is they aren't.

Sorry to go on at such length. Any info is appreciated!