Claim Loss On Residence After Relocation?

I bought my house in May of 2005, I then moved in August 2006 to California for a new job and my house has been for rent/for sale ever since. I was never able to rent, now have the house under contract and am doing a short sale on the property. I will be losing 50K on the value and will owe the second mortgage 13K and will be forgiven the remaining 37K through a 1099c. Since I actually lived there less than 2 years, can I deduct my losses on it by saying it was not my primary residence? I will end up having to pay taxes on the 37K as if it were income as well as 10 months of expenses (which I deducted much of on my 2006 taxes)...



Since i have not lived there in over 10 months and lived there for less than 2 years, can I change its status to a rental property or something where the loss could be deductible?? I really tried to rent it but there is a ton of rentals I would still lose a ton....



Help!

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