Noob dumb tax question.

[Matt W.]

OK apologies in advance if this is a dumb question, but I'm not quite getting it. 

Background, this is my first rental, manage and maintain it myself.  In Wilmington, NC. Small 3br/2ba. Total payment is $794 and rents for $1350 

Breakdown is:

Principal: $143

Interest: $474

Tax: $90

Insurance: $87

So for simplicity's sake I'm not counting saving capex, repairs, depreciation etc. my monthly cashflow is $556. So 556 -474 interest-90 county tax-87 insurance= negative $95. Am I understanding this correctly?

Also, I'm assuming I don't get to deduct the $143 principal portion of the payment because that is contributing to my equity.

I don't know why this seems confusing to me sometimes, but it does!

Thanks!