And if you make the deal, its tax deductible!

Also the cost of acquiring the financing may be deductible or part of the basis.

However, after considering business expenses (which I try obv put as much as possible), SS Tax, and a standard deduction, it brings my adjusted gross income down by quite a bit where it would be hard to qualify for a mortgage of 300K-500K.

I think the real value of 529 is being able to save tax free and grow tax free, and if your State allows a deduction, you get an extra tax benefit.

I understand that nothing I buy for the not in service property is deductible, its all capital improvement until I put it is service.

Deduct the interest.

And if all fails and you need an attorney, call Venoal Fountain at Hirsch Levy, & Fountain in Fairfield. 

Do you want to be able to deduct the expenses your rental incurs as legitimate business expenses, or would you prefer to add the full amount of the rent you receive to your income at tax time?

I was referring to when you dont pay net investment income tax or deduct your home office as business only deduction and not an investor.

The percentage of your house you are renting them will determine the percentage you depreciate and the percentage expenses deductible so for one roommate it is  about the income that it brings in vs your expenses.