help for a newbie re taxable rental income

[Kent Smith]

I have read several threads on this, but I am a newbie and still a bit confused.
We are married filing jointly with an income close to 150k last year. We own one rental property. No actual profit last year. Our monthly rental payment from the tenant was actually less than our monthly mortgage payment plus we did about 10k of repairs plus depreciation. I assumed that we would end up basically owing nothing since depreciation, repairs and non-principle portion of our mortgage payment on the house greatly outstripped the amount paid toward principle.

The tax preparer said we had to pay taxes on essentially the entire rental payment since our income was basically at 150k. This flies in the face of everything I have been told. I thought that, at least I could deduct property taxes, Interest, PMI and Home owner's insurance.

I am being told that, basically, we have to treat the entire rent check as taxable profit because of our income. I looked that the 8582 form, and it seems like that is true, but I am really hoping not. Any clarification would be greatly appreciated!

[Michael Plaks]

Quote from @Kent Smith:

I have read several threads on this

Your rent income will be erased down to zero by your deductions, so you do not owe more taxes.

Also, you do not owe less, because you cannot go below zero.

Good news: the excess loss is not wasted. It is stored for future use.