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Subject:  Re: Rental property that was never rented? Date:  3/13/2006  2:49 PM
Author:  ptheland Number:  84936 of 127637

We moved out of our main home in January and actively tried to rent it for several months at the going market rate. After four months, we got an offer to buy the house and accepted it. Can we deduct expenses for the months it was advertised for rent?

I'd stick my neck out and say "yes."

An IRS auditor might not agree with me.

If you decide to deduct the expenses, save as much documentation as you can of your bona fide efforts to rent the house.

Plus, at any rate the largest single expense is probably the mortgage interest. Worst case, that would remain deductible on your schedule A as a second residence. (OK, the worst case is that you already HAVE a second residence and wouldn't be able to deduct even the interest.)

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