“1) Claim all mortgage interest and property taxes under either homeowners deductions or rental property deductions. (This seems sketchy to me, though)”========> As said above; if the residence is rented for fewer than 15 days during 2012, then the rental income is not taxable and the mort int and r/e taxes may be allowed on Sch A line 6 / 10. If the residence is rented for 15 days or more and is used for personal purposes for not more than 14 days or 10% of the days rented, whciever is greater, then the mort int and r/e taxes MUST be allocated between the personal/rental days. In this cae, the rental exp may exceed the rental income, and the resulting loss’d be deducted against other income, subject to passive loss rules. For example, assume that r/e taxes and mort int exp were $5700 and your personal use % is 50%, let’s make it easy, and the rental portion is also 50%, then for tax purposes, $2850 needs to be reported on Sch E as long as the rental income on Sch E exceeds at least $2,850.and the other $2850 need to be reported on Sch A on line 6/ 10.As I assume that your PAL exceeds r/e tax and mort expeses.
“2) Split the deductions across the two deduction types/forms since the home was effectively a rental for 1/2 the year.”=========>Corrrect; the exp must be allocated between perosnl,1/2 of 2012 and rental days, ½ of 2012.
“3) Claim the mortgage interest and property taxes under both areas. (This also seems sketchy since it would be effectively double-dipping).”=======>As said in the example, above, unless you rented it for fewertha125 days, you need to allocate r/e tax and mort int expenses on Sch E and Sch A;so UNLESS you itemize your deductions on Sch A on your return, you can’t deduct mort int and r/e taxes on your return.