Q. Are we able to each have one of those homes as a primary residence from a tax perspective?
A. Yes, but, as others indicated, the details are important.
One it becomes your residence, the mortgage interest and property tax deductions become personal itemized deductions on Schedule A, rather than business (rental) deductions on Schedule E.
The accumulated depreciation goes to the new owner for future tax on sale considerations.
The new owner will have to live in the home for two years* to qualify for the home sale exclusion. And the home sale exclusion will have to be prorated (reduced) for the rental time.
*You might qualify for an exception to the 2 year rule, but the partial exclusion would be reduced further for the actual time of residency. See https://www.journalofaccountancy.com/issues/2009/nov/20091783.html
