Income tax on rental properties

[Pete Tallerico]

Hi everyone!  As a total newbie, I'm trying to figure out this game and am confused about how much and when do you have to pay income tax on a rental property.  If I collect $1000 in gross monthly rent, that's $12,000/year rental income.  From what I've read, I can deduct operating expense, depreciation, and mortgage interest (but not principal?).  On the webinar, posts, and articles, everyone calculates cash flow by deducting expenses which include principal AND interest (among other things).  Can we do this?  When do we pay income tax on the income generated on the rentals?  Any help would be greatly appreciated!