AS well I was the largest hard money lender in the state at the time so I was there almost every 60 days.However I did get audited by IRS because of Go ZOne elections and it only lasted 15 miutes. they wanted proof that I derived the majority of my income through RE ... which of course I did..

Good news everyone, the $500 de minimis safe harbor limit was increased to $2,500 for taxpayers who place property in service, that are NOT required to produce an audited financial statement(applicable finance statement).Effective for January 1st 2016 they are adjusting audit procedures to ignore items below this threshold provided provided you have a receipt.This means you will not have to depreciable items below this threshold as long as you elect that safe harbor.Of course it was released this morning, after I prepared for my presentation this evening.This represents HUGE $$$ savings and time savings.IRS Notice Notice 2015-82This Notice is effective for costs incurred during taxable years beginning on or after January 1, 2016.

Only selling an investment property do you get to take installment sale gain tactic.Then again, it's a function of whether you get audited

But if you get audited, I'm not so sure I'd feel comfortable defending that position.

You want an audit trail for company expenses.

In fact, I would be wary of depreciating an asset with no income year after year.Filing a return does start the statute of limitations as far ad IRS audits go.

Nolo's site has a recommendation of weighing cost v benefit...the benefit being audit protection.  

All note transactions will have an audit trail it's not hard at all to see who was passing notes.Doing RE without a license is usually a slap on the hand the first time, they absolutely don't take that approach in finance, depends on how badly you messed up and how many violations they might line up against you.

But if not, there's nothing to match on.The real safeguard is audits.

We have a similar system and it survived a HUD audit(yes its worse than the IRS), those systems are crucial when under scrutiny.