Help: Owner Occupied AirBnb/Long Term Rental Tax Strategy

[Dennis Kronenwetter]

Hello everyone and thank you for any input you may provide. This may be a long shot and I know eventually I will need to speak with a CPA, but figured I try to learn as much as I can now.

I am closing on a rental property October 19th and took advantage of the Owner Occupied loan to get the loan down payment and interest rates. I plan to House Hack (since I must stay for 1yr) to cover the expenses of owning the home and also because I have an apartment I am leasing at the same time.

My question is in regards to tax strategy. I believe I have a good foundation so far from researching but wanted to ask for help. I have two options to go with:

1. AirBnB the other two bedrooms

2. Long term rental the other two bedrooms

To make the most out of the tax filing situation with the given amount of time left in the year, how can I go about deducting and expensing...

1. I have read/heard I can expense and deduct a proportionate amount based on the room I occupied and the rental areas of the home. The main question is, does it make sense with it only being a couple months left of the tax year since I most likely would then not be able to itemize on personal level.

2. Also, as I understand, as long as the property is "in service" or actively looking for tenants I can write off the proportionate amount of expenses such as furniture, supplies, kitchen, etc. When actively looking for tenants, can that mean as simple as posting the house available on AirBnB? 

3. I've read multiple places that seem to contradict when I can deduct such expenses such as PMI, home owner insurance, utilities, security system, etc. If the home is listed on AirBnB or Zillow for rent (LT or ST rentals), can I deduct these expenses even during vacant times at the proportionate rate?

Once again, thank you for any help you can provide! 

[Natalie Kolodij]

Hey Dennis, 

Congrats on the purchase- house hacking is kind of tricky because everythingggg needs to be allocated. 

And then once you move out it needs to be adjusted again. 

When you rental is put in service (first available for rent) you'll need to depreciate the building only portion (Excluding land) 

AND you'll need to back out your personal use space sq feet, AND then find a reasonable allocation for all of the shared communal space. 

And the same for utilities and such 

Utilities, cable, taxes, mortgage ect will all need to be allocated between business and personal use. 

Whether it's ST or LT nothing changes there. 

The depreciable life and some of the rules are different for a ST rental than a LT- I would talk with a tax pro to get it set up.