Basis = cost of acquiring property, including purchase price, purchase expense (closing cost), major improvment.
These has to be capitalized and depreciated.
Expense = cost of maintaning property, including tax, insurance, repair, interest etc.
Expense from primary residence cannot be deducted. It's part of your living expense.
Expense from rental property can be deducted from your rental income from the year expense is incurred, or loss can be carryover to next year to be deducted from next year's income.
