Joint Tenancy Part Owner Occupied Rentall

[Karan Shah]

Let's say I was planning on buying a property with my brother suppose for $1M. Let's say we were going to operate on a joint tenancy basis (at 50/50)

If the plan would be that I would stay in a part of the property and I would rent/Airbnb the other half of the property. What would be the best way to ensure, for fairness and ideal tax benefit to do this.

The issues to bear in mind

1. Exemptions on Capital Gains Tax. If I am only staying in part of the property of which I only have a part of the share how would this work? What would count as unqualified towards the 250K

2. If the expectation is that the income from the room rented will be sufficiently higher than the room I stay in and therefore we would like to divide the income. If we do so, then does that mean we would also have to divide ownership of the room that I live in (to account for 50% ownership and payment on mortgage) and therefore I would consider paying him 50% of FMV for the rental. Is this a reasonable approach?