Mr. R lived in a two-bedroom, one-bath residence until August when he moved to a new home and converted his old residence into residential rent property. He had no trouble finding tenants who signed a one-year lease and moved in on September 1. As of this date, the market value of the old residence was $120,000. Mr. R purchased the residence six years ago for $180,000.
Identify the tax issue or issues suggested by the following situations, and state each issue in the form of a question.