By default rental income from real property owned by non-resident taxpayer is taxed at 30% rate of gross rental income. Rental expenses are not deductible.
But you can make an election under Internal Revenue Code section 871(d) to treat all income from that property as income effectively connected with a trade or business in the United States. In this case, your rental expenses will be deducted from your rental income and the tax base will be the net income after deducting all expenses.
You can make this choice only for real property income that is not otherwise connected with your U.S. trade or business. If you make the choice, you can claim deductions attributable to the real property income and only your net income from real property is taxed.
DEDUCTIBLE EXPENSES
Expenses that you may deduct from your total rental income include:
Advertising
Auto and travel
Cleaning and maintenance
Commissions
Insurance
Legal and other professional fees
Management fees
Mortgage interest
Repairs
Supplies
Real estate taxes
Other taxes
Utilities
Depreciation
Homeowners association dues, license fees, etc.