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Updated about 1 month ago, 10/18/2024
Tax return size --- an audit flag?
Is having a ton of rental properties & installment sales in a massive 1040 tax return - an IRS audit flag??
I have about 60 rentals and 25 installment sales. I'm continuing to add more over time. Most are cheapie properties, in rural Kansas. However they make money. I'm at a point where the profits buy me 1 or more new properties. a month.
The problem is my tax return is HUGE. This year it was over 250 pages.
My CPA seems smart, and has done IRS representation, and I'm honest and we keep good records - so I am not really worried about an IRS audit if it happens. A matter of fact, I had one a decade ago, a full IRS field audit, and passed owing $0.
Eventually I want to have a couple hundred properties, and more installment sales. This is something I want to pass on to my children, or sell when I'm old if they have no interest in 'em. All are in my single member LLCs, so they pass directly through to my 1040 ... so I have a lot of schedule Es, 6252s & a ton of "Section 1.263(a)-1(f) de minimis safe harbor election" statements. I thought about doing a partnership return with my wife since partnership returns are audited less, to reduce the size of my 1040, but my CPA said it was not worth worrying about.
Thanks in advance for any feedback.