First House Hack Tax Planning

[Zac Kucharek]

I currently live in a Duplex that we house hack, living in one unit and renting the other. This was purchased in December 2023 and I am trying to Tax plan for the coming year.

1. I have heard from others that you should learn and research tax if possible for your first property rather than hire CPA right off the bat as it should be less complex from strategy. Would you recommend hiring CPA for planning right off the bat for first property? I know that would be the easiest approach but wondering your thoughts.

2. I know many of the tax deduction in a House hack are 50% in a Duplex as half property is rental and half is residence. As I understand it 100% deduction on expenses that are soley related to the business or the rented unit, 50% deduction on expenses that relate to the general property as a whole ( mortgage interest, insurance premiums, common area repair expenses). And 0% deduction on expenses related to the live in unit. Is that generally correct?

3. I have saved and organized electronically all receipts for expenses as well as improvements on the property. How do you deduct "improvements" such as a room remodel in the rented unit. Is that something you have to depreciate over time?

4. Generally are there any specific strategies or deductions for house hacks that you would recommend from experience?

5. Finally, if I depreciate the value over 27.5 years to deduct? Is that so cut to 50% as it is a house hack? Secondly, would I have to pay that back in depreciation recapture upon sale? I'm sure there are strategies to mitigate that down the line when that time came such as a 1031 or something along that route?

Thank you in advance for your insight. Apologies for all the questions but figured it'd be more efficient all in one post.