And should they still file taxes separately or can they file jointly?

To ensure clarity and security, I will include the following language: “The sale of this property is contingent upon the current occupant vacating within 14 days of the ratified agreement.

They're like real estate taxes. 

There should also be records with the city of the guest house being built (if not, easy enough to report it to the city) and copies of his tax returns.

Financing and tax related issues will force the other into becoming part of whatever you decide to do and you don't want to overcomplicate your marriage with financial decisions that both of you are not on board with wholeheartedly.That being said, there are other ways to invest in real estate that don't involve you moving or evening buying a home.

More details:Mortgage (principal + interest): $2930/moProperty taxes: $15K/yearHome insurance: ~$1K/yrCost of home ownership/month: $4280/yr (not counting for any tax deductions related to the interest and property tax)If I account for $20K of interest and $10K of property taxes as an income deduction, then I can reduce the cost by ($30K x 35%) divided by 12 = $875 per month = $3400/mo cost of owning the houseRental income after 35% federal income tax + 9.3% state income tax = $2618/month (!!)

Mortgage, taxes etc amount to 1200 and HOA is 200.

@Kim Porciuncula we manage almost 700 doors, around 100 of them S8 and have clients from 11 different countries.You'll probably also need assistance with setting up an ITIN, Michigan LLC, corresponding EIN and opening a USA bank account - we have a tax attorney that can handle all that.PM us for additional assistance.

However, the guest does not have a social security number and is looking for a job after entering the country through the green card lottery.

i have 2 question. do i pay the capital gain tax in the state where the asset is located. how much do i have to pay in taxes if i do not want to do a 1031.