Q: We are looking at a probable transfer from Atlanta to Chicago. Part of the package would include full relocation benefits, because we won’t be able to sell our house in Atlanta any time soon.

We would only be in Chicago for about four years. There are a lot of very nice homes for rent in one of the far northwest communities, which would be near where I’d work.

I’m thinking maybe we should rent a home instead of buying one. Would we have a capital gains tax event if we don’t buy another home right away? If real estate begins to appreciate again in the next four years, we would miss out on that appreciation. What should we think about when making this decision?

A: You wouldn’t have to pay capital gains tax on your Atlanta residence as long as you’ve lived in that home as your primary residence for two of the last five years. If you meet those requirements, you can keep any gains you have in the property up to $500,000 (if you’re married, up to $250,000 if you’re single) tax-free.

Chicago is a more expensive market than Atlanta, and while the cost in the northwest quadrant might be less than the average price for the metropolitan area, you’re right to think about renting. In general, I don’t know that four years is enough time to make any money in housing these days, although if you buy the right place at the right price, and fix up the property, you might get lucky and wind up making a little money down the line — or at least breaking even.

For other first-time buyers weighing whether to rent or buy, the first-time home buyer’s tax credit could play a big part in whether your own numbers work out. But these numbers have yet to play out. If Congress passes a significant tax credit for first time buyers and others, buying a home in some situations, with today’s low interest rates, may be cheaper if you stay in that home the next several years.

For all buyers making the decision to rent or to buy, it’s all about the math. You might find that renting is so cheap right now, that you’ll be able to sock away a lot of cash over the next four years than if you use your cash to buy, own and maintain a home. And that might be a very smart move. And for others, the price of housing may have come down sufficiently along with low rates to justify buying over renting, particularly if the federal government gives the buyer a significant tax break.

Jan. 19, 2009.