What expenses I can take on 2nd home (non-rental) which I have given to my relatives

[pegassist]

What is the name of your state (only U.S. law)? NJ

I own a second home in NJ which I have given to my relatives to live in and don't charge them any rent. What deductions can I take on my second home?

a) Can I take depreciation for 2nd home? How do I do this? Which form/method of depreciation to use?

b) Can I take property tax credit for both the houses? For NJ return, it only allows a max of $10,000 as property tax deduction. The property taxes that I pay for each house is over $10,000.

 

[tranquility]

You can deduct mortgage interest and property taxes.

You may have to file a gift tax return if the FMV of the yearly rent is over $14,000.

Edit:
On your federal return. I do not know of NJ limitation.