Multi Family Owner Occupant - Tax Savings

[Preston Phillips]

Looking to buy a multi family (3 unit) owner occupant this year. Goal is to live in one, long term rent one unit and short term rental the bottom unit. Im reading the book on tax strategies volume 2, and I’m learning more about depreciation. I am curious what others have to say or  what they learned from a similar experience. My fiancée and I will be married next year (after 4/15), we will be over the $150k Adj Gross income threshold together but if we continued doing separate taxes we would fall below individually. I wasn’t sure how or if that could work as we would own the property together. Would love to get everyone’s thoughts and input on the matter. Thanks in advance! 

[Aaron Zimmerman]

Preston- really depends on the situation but generally MFJ will be more advantageous. That being said, whoever you go with for your tax return can easily separate out you and your wife and tell you what’s best in your situation. For house hacking, a portion of the expenses will be allocated to you personally (either non deductible or on schedule A), and then rental (put onto schedule e). The depreciation will be allocated in the same manner. There are tons of articles online (some written by members of this community) that explain in more detail.