Rental vs Home Exclusion

[Bees Knees]

If the property is rented for 18-months and later sold at a gain, I assume the gain can be excluded given the 2 years out of rule residency rule, etc. Is that correct?

Yes, but did you see Armando's point? If you try to convert this to rental property, basis for purposes of figuring your loss would be the lesser of basis or FMV. So you can’t convert any of your loss now into a deductible loss. The loss has to occur after it is converted to rental.

[Joe Btfsplk]

Rental problems

Renting the home as a means of getting a tax loss can be hazardous to your wealth. In addition to all the other comments, you may get a destructive tenant.

Tenants can also be a pain in the neck (or other parts of the anatomy).

I once owned an apartment building. One old lady would call me to put in light bulbs. Another won somehow managed to get a dripping faucet every week or two. I would install a new valve seat and washer which would solve the problem for another week or so.
Repairs kept cropping up. I got a few tax breaks but about the best I ended up with was about a break-even, even including the tax breaks.