| | Deducting losses on a Rental Home
I'm in the military and being reassigned to a new location in 6 months time. Unfortunately we are looking at a loss of $80K if we sell our home. While I know I can claim no deduction if we sell, I'm weighing my options on renting instead of selling.
If we rent, assuming we can find a renter, our annual losses will be approximately $6,500. This factors in real estate taxes, insurance and homeowners fees in addition to the mortgage. How much of this can I deduct and could you estimate actual savings I might gain from this deduction? I'm in the 28% tax bracket.
Additionally, assuming no appreciation over the next 5 years, will I then be able to write off he $80K loss if I sell after renting it? Is there a length of time I must rent the home in order to claim the loss on the sale?
Thanks very much!