I'm sorry to bother you again but I think I need to give you more specific information. I've read Pub. 527 and I'm still confused. So the facts: my parents have owned a home in Charleston SC since 1975 or thereabout. They came to our house in VA in Dec. 2020 because Daddy was sick and covid was rampant in SC. We realized then they would never live by themselves again. Daddy died in March 2021. My mom needs care and so she continues to live with us. They never lived in the home in 2021 altho we went down in April for 2-3 weeks and cleaned out their possessions and started doing work to get the house in better shape. My niece is renting the house now and started paying rent July 1st although they lived in the house for several weeks to supervise some of the repairs, etc. I consider it is FMV rent based on the condition of the house and its size. So we had over 16k in expenses and $11k in income. I hate to lose the $6k but of course I want to do this the correct and legal way. It appears from Pub. 527 that since there was no personal use by my parents, perhaps that counts. A concern is that we knew we would have to rent or sell the house but had not really figured out what to do until Daddy died.
Another issue I have is whether Mama is considered a resident of SC or VA! I was thinking maybe half year resident of each. If you have any insight into that issue, I would very much appreciate your advice.
Many thanks!!
