Depending on the cause of the taxes it could be offset with write off's, deductions, carry overs, etc.You could always take out a loan through a cash out refinance to pay off or down the lien.

Plus let's face it: it's a bit hypocritical to complain about tax incentives as real estate investors because we get a lot of tax advantages ourselves (write offs, depreciation, pass through deductions etc. these are some of the main reasons many people invest in real estate). 

Deduct from tenant.5.

You'll need to report the rental income at tax time, but you can also deduct related expenses, so keep good records.

(if I made $200k I would be taxes on 80k after taking the standard deduction and child tax credits, etc. 

Then there os a "De Minimus" deduction amount that you can do for $2,500.

**Maximize Deductions**: Use QuickBooks to tag and categorize your expenses correctly.

It wasn't worth having a claim on our insurance record, and the deductible was not close.  

But for the unit you’re living in, you can’t do that.2.50/50 Split: Since you’re splitting expenses down the middle, make sure you both agree on how that’s going to work, especially since your unit won’t be bringing in rent.3.Your Unit: You won’t get to write off depreciation or rental deductions for the unit you’re living in, but you might still get homeowner perks like mortgage interest deductions.4.Partnership Stuff: Just make sure you and your partner are on the same page about how you’re splitting costs, income, and who’s handling what.Might be worth chatting with a tax pro to make sure everything’s set up right.

Offsetting both interests, I will lower my interest paid out since it's more than my interest coming in. till I can refinance to a matchable interest rate.Investment Property interest is a tax-deductible expense.