House Hacking and Taxes

[Trever Whittaker]

I have successfully house hacked a few times. I typically buy homes that I can easily turn from Single Families, into upstairs/downstairs duplex's. My current home will require quite a bit more rehabbing to put a kitchen and furnece into it and I need to get as much tax advantage as possible. I have seen people who rent their homes from their LLC or even just put their primary home on their Schedule E on their taxes so they can basically write off any expenses related to the home. I usually live in my homes for a few years before I put renters in to rebuild my reserves and find the next opportunity. I plan on being in this home at least another 2 years unless I find a great home to hack before that.

Does anyone use this strategy and how many homes would you want to have before you put your primary on your schedule E? Most people I have seen use this have had 3+ rentals. I am down to one rental and my current project right now and I am not sure if I have a strong enough case to fight the IRS in saying that it is part of my "real estate business"

Thanks for any advice.