PCSing-Questions about Mortgage

[2Munchkins]

My husband and I are PCSing overseas in a four months. When we moved into our house 5 years ago we put a big chunk of money down. Unfortunately with today's housing market if we sold the house now we would probably walk away breaking even (loosing all we put down). Then in 3 years when we return (hopefully) we wouldn't be able to buy another house right away because we would have nothing saved to put down. So I think we have decided to try and rent the house out hoping the market turns. Unfortunately there is about a $500 difference in our mortgage and what we think we could get for rent monthly. My question is would we be able to still write off the interest we are paying on the house even tho we would be renting it out?

[LoveMyHalos]

Check out IRS publications 527. I am pretty sure you can deduct the $500 you lose every month as a loss, but I'm not sure you also get the interest. I could be wrong, though.

[gunsgirl]

you will not get the interest since it will not be your primary residence- but you can write off the loss ( or at least part of it).
also your insurance and taxes will change with it not being your primary residence.

[guynavywife]

Your expenses are treated as an investment/business expense. Your losses may be deductable.
However, depending on the state the house is in, you may lose homestead protection for real estate tax purposes.