So, after some brainstorming, it occurred to me that I could master lease the properties from them for "90% of collected rents less expenses".Then it occured to me that I just converted what would have been self employment income for managing properties into rental income since I'm leasing the properties.Any tax experts care to chime in on whether that would fly in an audit?

You want time to send in your written form to the 1031 companies audit review department.

The IRS's preferred methodology is engineering-based and that is what we provide and is most defensible if you are ever audited.

Amending the return doesn't make any sense and it has a higher chance of improving IRS audit risk than it does maximizing the bonus depreciation deduction....

Account ClosedYou should be given a receipt.You may be required to issue a 1099 to him.A receipt will provide support to you in the event your return gets audited and they question your deductions.A 1099 is required to be given to contractors depending on if you are in a trade or business and the amount.Failure to do so can result in penalties.

(CRMC).These are companies that have been audited by the National Association of Residential Property Managers and have demonstrated a high standard for both procedures and customer service.

Again probably won't come up until he gets audited because he didn't pay taxes on his income.

But he advised that getting audited will just be an expensive, time consuming

All- my partner and I are looking at a 25 unit apartment building that has exited the 15 year LIHTC compliance period, still required to report and audit until 2033.

we just did our first ones of these on some new builds.. they are energy efficient as heck we got a 100 % score from the outside energy audit company.. they are a little bulky on the walls.. and they are not as cheap as standard duct work systems but .. it does allow taller ceilings within the same vertical envelope so that was cool.. and little quirky to use. but once that's done seems to be OK.. in a rental setting though I would be a little worried each unit has separate controller so if you have 4 ducts your going to have 4 controllers I can see tenants losing them  destroying them etc.. so check that out.