We bought our first house in 2022 (house A) and lived in it until this summer when we moved into a new house (house B)
We are thinking about listing A as a rental and listing it for sale in Spring 2026 when it’s hopefully a better market
A couple questions on this approach
- if I rent out A, I assume I list the rental income on Schedule E and then I am able to deduct any mortgage interest and property taxes. Is that correct?
- If I rent out A, would I lose the Primary Residence Exclusion when I sell if it’s just for a short period? Less than a year
- If it doesn’t rent for some reason can I still list on Schedule E with no income but still deduct my mortgage and property tax for the period I have listed for rent? My new house B has a higher interest rate so it would be nice to use the 750K mortgage interest deduction for that house.
- With no income I assume the expense / deduction will be disallowed and instead be carried over until I sell the house - but if I am still eligible for the Primary Residence Exclusion is there even capital gains to deduct the carried over deduction against? Or soild it reduce other ordinary income?
Thanks in advance
