It protects you both inside and outside the legal entity.

I still have a years to pay off my lender ~23yrs at the rate I'm going, that is unless I can get creative with a HELOC or other ways to cash out to pay off that debt 

. - What legal steps should I be taking to reduce future liability and be prepared on the tax front?

It is considered as giving legal advise.

Hi everyone,I’m interested in raising debt for small multifamily deals but I have a few questions about it and how I want it to work with my proposed strategy.One of the things I’m wondering about is how to structure a deal with multiple debt investors and what security they can be offered.  

@Cynthia Miller This is a question for one of the legal forums you picked the vacation rental forum.

The obvious thought is to not claim any as it is my first property and there will be only around $4k in revenue this year anyway but my thought is that I can potentially claim and increase my taxable income which will raise my Debt/Equity ratio in order to purchase another SFH or small MFH next year.

Wondering if there are any legal issues with this.

This gives you debt pay down, hopefully market appreciation, forced appreciation via improvements and tax benefits, lots of tail winds. 

So, I wondered if this is even legal?