If the housing market in your area is depressed and you anticipate that the sale of your personal residence will result in a loss, consider renting the property prior to the sale to clearly establish that the home is no longer your personal residence. When the house is sold at a loss, it will decrease in value since its conversion to rental property will be an ordinary loss; whereas, if you had sold it without converting it from personal use, the loss would not be deductible.
The taxpayer reduced their taxable income by $5,000 by renting their home prior to a sale to establish that the home is no longer your personal residence. Since the taxpayers income was taxed at the 30% tax bracket, the income reduction may decrease their income taxes by $1,500 ($5,000 x 30%).
You should consider renting your home out prior to a sale to establish that the home is no longer your personal residence.