Considered rental property?

I moved out of my house in Dec 2012. I spruced it up and put it on the market in Feb 2013. In Oct 2013 I received an offer that included a delayed closing of 6 months and the buyers would move in and pay rent while waiting to close. 

Can the house be considered rental property now and expenses deducted on my 2013 and 2014 taxes until closing?

Answer :

I guess so. If you still want to let the buyer move in, you need to amend the purchase agreement by adding rental terms. You need to consult an attorney to draft the agreement so you can be sure it is adequate. These provisions should cover how much rent will be and when it is due. Also make sure the buyer does his walk through inspection prior to moving in. That way there won't be any surprise problems at the actual closing time. Upon moving in, the utilities should be put into the buyer's name. Make sure the buyer obtains adequate property insurance. The seller should require that the buyer puts a substantial deposit in escrow and sign a liquidated damages agreement. The deposit can be applied towards the down payment if and when the sale closes on time. If the closing is delayed or the buyer backs out, the deposit will be forfeited as liquidated damages. Your agreement should stipulate that the buyer will receive only a portion of his deposit back if he vacates the property.

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