Question QUESTION:
My family and I recently relocated to California. We owned a home in NY since 2005 and are exploring options to sell or rent the place. If we decide to rent, would the property still qualify as "primary residence" and would we be able to deduct mortgage interest and taxes? Thanks!
ANSWER: Yes, you temporarily rent the property pending an eventual sale and still 1.) write off the mortgage interest and taxes, and 2.) take the exclusion of gain on sale (if any).
---------- FOLLOW-UP ----------
QUESTION: Thanks for the prompt reply. Can you share additional color on "pending eventual sale."
Answer My answer was contingent on you eventually selling the property within a year, or two at the most.
If you rent the property longer than a year or two, the IRS may take the position that you have converted the property to an income producing asset, a rental property, and then you would lose the exclusion of gain on sale of a personal residence.
