We own a home in Utah. Bought it in 2006 and have lived in it ever since. We pay $1350/month in interest. Wife has a two-year fellowship starting July 1, 2011 in Atlanta. Can't sell house for what we owe, so we're looking at renting it out while we're gone and renting a house in Atlanta. FY 2010 our combined AGI was just over $150,000. It should be at least as high this year and next.

Are we going to be able to deduct anything for renting out our home? Is there any way to not have the rent from the house count as income? Are we going to get nailed on taxes (i.e. make too much to be able to deduct rental expenses)?