Anyone ever get an IRS audit?

[John Morgan]

As I’m preparing my taxes on turbo tax again this year for my 10 SFRs, I was curious to hear what people’s experiences have been with the IRS on an audit. Chime in if you’ve ever had one for real estate investments and what the process and outcome was like. The more properties I pick up, the more complex things get with rehabs, cost segregation and overall expenses! So far it doesn’t seem too bad to do on my own, but I would hate to get audited and have to go through all these expenses in detail.

[Joe Homs]

@John Morgan yes about 30 years ago and it was very enlightening.  What I learned was that you need to keep good records, receipts and document everything about your business.  The auditor went over Income and expenses and asked for receipts.  At the end of the day there was NO change.  I asked him why I was audited?  He said the computer just pops out files that look suspicious.  Maybe it was because I was able to write off so much that year, that I did not owe any taxes.  Anyways, I still do Turbo Tax and Quickbooks to keep track of it all.  Keep all your receipts and everything else.

Good Investing...