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You must treat the property for tax purposes as it is. If it is your second home, you are allowed to deduct mortgage interest (up to prevailing limits) and property taxes on you Schedule A (itemized deductions).
If the home is a rental property, you must treat is as such and report rent and expenses including mortgage interest and property taxes on Schedule E (Rental income).
If the home is part personal use and part rental, you must prorate the expenses.
If you are renting the home, but not for profit, the treatment of income and expenses is slightly different. You should engage the services of a qualified tax professional if you have a rental situation.
If you are not renting the home, calling it a rental property and deducting expenses would be considered fraud. You must at least be actively trying to rent the property and the property must be available to use as rental in order to deduct any expenses.
I see what you are trying to figure out.
The 150,000 limitation is for rental losses. In general due to passive activity rules, most people are granted a special rental real estate loss of up to $25,000. However, if your adjusted gross income is above 100,000, then for every two dollars above 100K, your loss amount goes down by $1. Therefore, no rental losses above 150k. Here is info about that at the irs website: http://www.irs.gov/businesses/small/article/0,,id=146326,00.html
This concerns losses. If you wish to profit from rental income, and you feel that the effort is worth it, you should concern yourself with how much money you can make renting. (The undeductible passive loss also carries over to future years)
As a second home, you may deduct mortgage interest (up to prevailing limits) and full property taxes on your schedule A. However, in 2006, if your income is greater than 150,500, your schedule A deductions start to get phased-out.
This is a big decision and you may want to talk to your tax preparer to get some estimates based on your income level before you make up your mind.