I bought a home end of 2009 but couldn't break the rental agreement of my previous rental until may 2010, so for the first 5 months of 2010 I sublet it (my previous rental) for a lesser price (with landlord consent) to someone else.

So do I report this on Schedule E?

If so there would obviously be a loss (sublet income < rental cost) but then it would trigger the Active/Passive question:

- If it's considered an Active Loss, I won't be able to offset anything since I have an extremely low taxable income in 2010 anyway, so would filing a Schedule E be really necessary?

- If it's considered a Passive Loss, would I be able to use the "passive loss carryover" in the future to offset any other passive rental income or would it need to be related to the same property (which of course would never be the case)?

Thanks in advance, I really need to find out as soon as possible because I want to file my taxes as soon as I can (I'll be expecting a refund).