Own my house free and clear. Lived in it till Apr 30 2012. Bought a retirement home and moved into it May 1 2012. Used May-Jun-Jul to fix up my previous home. Rented it beginning Aug 1 2012 thru end of the year. Did so without a realtor or rental agency. Used couple of private contractors for the fix up totaling about $5K. Did not live in the prior house at all after April 30.

What is proper answer to the questions at the top of Sch E? The passive/non passive stuff is confusing. Materially involved? 1099's?

Understand claiming the rental income as ordinary income. Can I deduct the pro-rata portion homeowners insurance for the rental period? Can I deduct the repair costs?

Thanks