Income Tax Deductions and Property Managers

[Matthew Orr]

I'd like to know if anyone (especially any EA or CPA) might have experience here.  I'm finding that property managers are good about sending invoices detailing expenses and revenue for the property.  However, for services they are hiring out and/or paying such as utilities, cleaning, landscaping, etc., they are not wanting to send copies of the invoices to me that they are paying.  I'm thinking that, if audited by the IRS, I'd need to have copies of the actual invoices and that the property management statement alone would be insufficient.  Any thoughts?

[Michael Plaks]

Originally posted by @Matthew Orr:

I'd like to know if anyone (especially any EA or CPA) might have experience here.  I'm finding that property managers are good about sending invoices detailing expenses and revenue for the property.  However, for services they are hiring out and/or paying such as utilities, cleaning, landscaping, etc., they are not wanting to send copies of the invoices to me that they are paying.  I'm thinking that, if audited by the IRS, I'd need to have copies of the actual invoices and that the property management statement alone would be insufficient.  Any thoughts?

As long as the management company is a professional company, and your relationship is arms-length (i.e. they are not just another company owned by you, which in your case they are not) - you should be fine during an audit. Their detailed monthly reports should suffice.

On the other hand, as the property owner, you have every right to demand that they provide you proof of the expenses they incur on your behalf, such as invoices. Not for the IRS audit, but to keep them accountable.