I have a home that has a basis of about $415K (due to many recent improvements that were made) and am having trouble selling it. If I convert it to a rental for one year and take about $10K in depreciation (using straight line) and then sell it next year, I think it well still sell AT A LOSS since I think it will be a long time before I can get $405K plus realtor's commissions for the house. Two questions:

1. Since I expect to sell at a loss, will the depreciation that I took still have to be recaptured (i.e will it be 1250 depreciation)?

2. Since it will be a rental when I finally sell, can I treat it as an investment rather than a primary residence sale so that the loss can be deducted?

I realize that most depreciation recapture questions deal with selling their homes at a gain, but I am concerned about the tax consequences of selling the home at a loss.