I rented out my condo in Boulder for two years before selling it when I first moved to England. I owed nothing in taxes on the rental because you can write off anything you do on the property. You paint it? Write off that expense. You fix the plumbing? It's a write-off. I can't remember the details, but there are a number of other write-offs allowed when you're renting out a property. Check with an accountant to see how much things have changed. Oh, and you can depreciate the value as well. I think.