Turning a SFH into a Duplex

[James Feyler]

Good evening, 

What issues, or problems would I have if I was to finish a basement of a house (close off and update the existing mother in law apartment) and turn it into a second unit in a SFR for rent either long term or short term? Does the home need to be assessed as a Duplex to be able to claim the other units rent as income? How is making a second unit any different than traditional house hacking? I plan to live in one unit and rent the other for a year at least and would like to rent both units eventually.