(1) If you rent the place for two weeks or less, the rental income is not taxable. Mortgage interest and real estate taxes are deductible the same as a residence.
(3) You rent it out more than two weeks and use it less than 10% of the rental days.
You still have to allocate the expenses as we discussed in (2), but the IRS now allows you to claim a rental loss. Why? Because at less than 10% personal use the IRS does NOT consider this to be your second home. The IRS considers it a rental.
There is a downside, though. You know that mortgage interest allocated to the personal use? It is not deductible anymore. Why? Because the only thing that made it deductible before was that it was attached to your second home. As we said, under scenario (3) the IRS considers this to be a rental, meaning it is not your second home.You do get to deduct the real estate taxes allocated to the personal use. Taxes have a different tax treatment.