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As single guy with a regular job, great credit and no debt, I am making an offer on my 1st property which is a 2-level C1-40 zoned building which I will convert to my principal residence/business in the State of Washington. I did the research and it is totally feasible. I will also qualify for the 1st time homebuyers credit!

One floor will be used as my primary residence/musician's workshop. And I will temporarily extend an existing tenant's lease (massage therapist) occupying the other floor although, my plan is to eventually use the whole building as my primary residence/music-recording studio/club while keeping my day job as long as I must.

Question 1: Do I need to establish a business license to continue collecting rent from the current tenant?

Question 2: Can I write off needed renovations(bathroom, kitchen, etc.) as a business expense if I establish my business license now, before purchase?

Question 3: Will I still qualify for the 1st time homebuyers credit?

Question 3: Other than loan interest, what are other tax benefits of owning a commercially zoned property and using it as my residence/business?

Thank you in advance!
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