We had to rent out our primary residence in Colorado for 1 year while I took a medical fellowship in another state. We rented it on July 1, 2010. Due to the terrible real estate market in Denver and our low equity in the home, we had to rent for the home for less than our mortgage payment. We are renting a home in another state. Our mortgage payment is approximately $1500/mo and we rented the home for $1200/mo. I've always done my own taxes with the help of online software. How is this sitatuation going to affect my taxes? Can I deduct the loss from each month ($300) from the rental "income"? We're already taking a huge loss on this house (value has dropped considerably due to nearly foreclosures). How do I "stop the bleeding" by getting the best deal on my taxes? Our combined income is about $70,000.