Payments that you make normally fall into one of 3 buckets100% of the payment can be factored in somewhere on the returnPartial payment can be factored somewhere on the return0% of the payment can be factored in somewhere on the returnHouse-hacking also has considerable tax implications in the event that you want to sell this property.You can potentially defer a portion or all of the gain on the investment property with 1031 exclusion.You can potentially exclude a portion or all of the gain on the personal residence with section 121 exclusion

Payments that you make normally fall into one of 3 buckets100% of the payment can be factored in somewhere on the returnPartial payment can be factored somewhere on the return0% of the payment can be factored in somewhere on the returnHouse-hacking also has considerable tax implications in the event that you want to sell this property.You can potentially defer a portion or all of the gain on the investment property with 1031 exclusion.You can potentially exclude a portion or all of the gain on the personal residence with section 121 exclusion

If you did a Partial Reconveyance would it not exclude the 1 acre from the ag exemption on that 1 acre? 

I highly doubt that an exception would exclude an entire house.

After excluding commuting miles, the allowable miles (per IRS) I drive once every 2-3 years from the rental to another destination and back just isn't worth keeping track of.Do the same restrictions apply when driving to and from a home and construction site?  

It depends on the language in the policy, but I wouldn't be surprised if the policy excludes coverage for criminal acts - like assault and battery, which this appears to be.

That way I have both a subtotal for cash flow, including principal payments, and then the net income, excluding principal payments, on the face of the P&L.

Additionally, net investment income does not include any gain on the sale of a personal residence that is excluded from gross income for regular income tax purposes.

In a nutshell, it means $200K annual income for an individual OR $300K for a couple OR a total net worth excluding equity in a primary residence of at least $1 million.  

Depreciation recapture can not be excluded under Section 121, so any depreciation taken would still be recaptured.