Renting personal residence before living in it

[oceanlovin'ea]

Client just sent me a text. They are contemplating buying a condo. The unit is presently leased through May, 2015. They would honor the lease agreement and not make the people move until next year.
But they are purchasing this condo as their personal residence. (They are currently sharing a condo with his mom and step-father).
Would this be considered rental property for 1 year. Then converted to personal residence. The real purpose of the property is not rental property. The depreciation on the property would lower their basis when it was converted to personal.

Is that the best or only way to handle this? Just couldn't think if there is a different way to look at this. Never had it come up before.

Thanks.

Linda, EA

[Burke]

You are correct, IMO. It is rental property as long as it is rented and income is being received. Then it would convert to a personal residence when taken off the rental market and they begin to use it as their home.