Tax Advice on Property

[Mose Gebremeskel]

Tax Advice - I have a duplex that I live in (house hacking) and we are in the process of renovating it still so we haven't had a tenant in it yet. Are there any advantages when filing for taxes or disadvantages? Or anything we should be on the lookout when filing taxes? We bought the property in October 2023. 

[Michael Plaks]

Quote from @Mose Gebremeskel:

Tax Advice - I have a duplex that I live in (house hacking) and we are in the process of renovating it still so we haven't had a tenant in it yet. Are there any advantages when filing for taxes or disadvantages? Or anything we should be on the lookout when filing taxes? We bought the property in October 2023. 

So, in 3 days nobody wanted to comment. It is because you are asking a very common question that has been discussed too many times, and we're kind of tired of repeating this stuff. Not your fault certainly, just explaining the setup. Here is one blog post that covers the basics: https://www.biggerpockets.com/blog/2016-02-21-tax-implicatio...

All of this comes into play starting on your 2024 taxes. For 2023, the only consequence to keep in mind is that you're only eligible to claim half of your mortgage interest and half of your property taxes as personal expenses, and the other half would be tied to your future rental unit. It may sound as a negative, but there is a 99% chance that it won't change your 2023 taxes at all and will end up as a positive thing eventually.