Tax Implications of Living in one of Your Units

[Steve Q.]

Help me out here please, smart people!

Is there a tax savings to live in one of your own units vs renting your primary residence somewhere else and renting out all your units?

Scenario with fake round numbers: 

3 Unit building cost basis for depreciation: $300k

Each unit rents for $1500 - Total $4500 a month: Annual $54000 (Let's assume that includes vacancy for simplicity's sake.)

Tax deductible expenses:

Depreciation : 300k / 27.5 = $10,900

Mortgage Interest 4.5% on 300k balance: $13400

Property Tax: $5000

Insurance: $2600

Maintenance:  $3600

Total: $40,000 deducted from $54000 income.

Leaving $14000 in taxable  income.

Assuming all of it in the 22% bracket + 4% state: 26% Tax = $3640

If I live in one unit - I lose that $18k annual rental income, but also lose 1/3 of the deductions:

Income:    $36,000

Deductions:  $26,666

Taxable income: 9,334

26% tax: $2427

So, let’s say I’m currently living in one $1500 unit. If I were to go rent a place somewhere else to live away from tenants. And I spend the same $1500 a month on that rental, I would be losing $2427 a year, $202 a month, to taxes. So, I would actually have only ~$1300 to go spend equally to live elsewhere.

Is this right? Am I missing anything?  Is there a $200 value a month in tax savings by occupying one of the units in this scenario?

Management costs would be the same.    

Thank you!