Hello, THANK YOU for choosing Just Answer. My goal is to help make your life...a little...LESS taxing.
Respectively I choose not to advise you on whether to sell the house, but I will present you with pertinent information that may assist you in making your decision.
We all know that property
values have pretty much fallen through the floor, though in some areas, the decrease in property values are not as bad as in other areas of the country. If you're earning $169,000-$200,000 yearly, and you have no other deductions, you should take as many legitimate deductions as you can to reduce your tax liability
. With the house there is the probability of claiming mortgage interest
(providing that you still owe on it), property taxes
, insurance. You selling the house would depend on the current property value and whether or not you incur not just a loss, but how big of a loss. It's not a certainty that you will incur a loss on the property, but it is a probability depending upon how much it has decreased in value since your purchased it.
You wrote that you have no other deductions. Are you taking deductions on the house that you are renting to your brother? Of course, if you want to claim deductions, you will have to claim the income
(rent) as well. Technically if you are receiving FMV rent from your brother, this is considered income and should be claimed as such on the Schedule E
. So if you have to claim the income, why not claim the deductions as well.