Under the vacation home rules, rental property expenses are deducted in a specific order. What is the order? Rental portion of Schedule A expenses, depreciation, carryover of depreciation, indirect operating expenses, carryover of indirect operating expenses, and direct expenses. Rental portion of Schedule A expenses, direct expenses, indirect operating expenses, carryover of indirect operating expenses, depreciation, and carryover of depreciation. Direct expenses, rental portion of Schedule A expenses, depreciation, indirect operating expenses, and carryover expenses. Direct expenses, depreciation, rental portion of Schedule A expenses, indirect operating expenses, and carryover expenses.