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Old 03-27-2011, 10:16 PM
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Join Date: Mar 2011
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Below Market Rent

Situation:

We purchased a home in 2008 that we lived in for 10 months as our primary residence, put it back up for sale and moved to another house that became our primary residence. After 8 months empty and for sale (Oct. 2009), we rented the home below fair market value while still offering for sale. 8 months later (June 2010), the rental ended. We sold the home for $70K less than we paid for it in July 2010.

Question:

I understand that by renting at below market rent, the home is considered to have been under personal use. My question is...does the fact that I never rented at FMV disqualify me from deducting a loss (to the extent a loss occurred) on the sale of the home?



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