Tax Q re: Duplexes

Factual Questions
1

I’m seriously thinking about buying a house in the near future (hopefully before June 30, 2009), and I have some tax questions. (Well actually, I have questions on every aspect, up to and including whether I’m getting in over my head, but I digress.) While I could afford to buy a $150K property on my own, I think it makes more sense to look for a ~$225K duplex and rent out half. (I would be able to afford the payments without a renter, just not much more; with a renter, I would be able to use that money to help improve the house.)

Does anyone here has any experience with owning a duplex and renting the other half?
Does the whole property count as your primary residence?
Is the rental half a “rental property”?

This is also relevant to the First Time Home Buyer Tax Credit. So far, I haven’t read anything that explicitly eliminates duplexes from eligibility, but I haven’t read anything that explicitly includes them, either. Anyone know how this applies?

Thanks
-Geek

2

Schedule E for rental income has sections which say something like “applies to entire property” versus “applies to rental portion.” Your power bills would apply to the entire property, and thus must be prorated. Painting the inside of the rental property only, for example, would not need to be prorated. In theory, you should prorate base d upon (rental square ft) / (total square ft), although in practice people sometimes cut it in half. This might be something you contact an accountant for.

Not too sure about the tax credit, but it doesn’t seem to explicitly exclude rental duplexes, although it would probably only apply to the prorated purchase price. You do know that this “credit” is a 15-year interest-free loan, though, right?