The tax does not add up to much, but if you legitimately qualify for the Solo 401k, avoiding UDFI saves you some paperwork and expense.Get on the phone and check out a few providers.  

Here are some of my next recommendations based on your current BP Profile Bio:- Listen to the BP Real Estate Rookie Podcast (https://www.biggerpockets.com/podcasts/real-estate-rookie) - Read "Set For Life" by @Scott TrenchI see that you are about to graduate college and plan to become an Army Officer by May 2025!

You might start by asking them what their plans are for selling the house.

My plan was to build and sell the beach house or have it on AirBnB. 

Even if I'll live in this duplex, I plan on only living in it for a year.

It's a great plan.

No, I’m just trying to save them from wasting $25,000 and 6 months time on something that won’t work, and if it did would probably put them in a precarious legal position.  

My husband and I are trying to buy a home in the Houston area this November, but don’t plan to fully move there until the summer.

Our plan is to hold the house 5 years + until the market comes back, or possibly just holding it long term. 

Tenants save money when using a shared meter, so there's plenty of room for error when calculating how to distribute the charges.