When they get new properties, ask them if you can help them do the audits.

And if you have an accountant that is shall we say "aggressive," what happens with IRS audits and the statute of limitations?

The LLC game you describe won't fly in an IRS audit (I'm a former IRS employee from large case division and a CPA so I know).

In general, partnership elections are preferred for passive investments, and each investor is allocated a portion of the LLC's income/(loss) relative to their ownership %.S-Corp elections can be helpful when you have a lot of earned income, so you can pay out some of the profit as distributions, avoiding the ~15.3% self-employment tax that would be due if those amounts would be paid in salary.Lastly, C-Corp elections provide some incremental opportunities for business deductions, and are apparently the least-most audited structure.I have a series LLC w/ an S Corp for my rehab company, a C Corp for my marketing company, and I'll add a new series for each rental property I may acquire outside of my retirement accounts.

I have the receipts at home, but my question is, shouldn't a CPA take your word for it first, then I should produce the receipts to corroborate it if I'm audited?

The bank doesnt really get notified of it moving to an LLC, but at some point in one of their internal audits they may discover that the deed is no longer in the name of the person on the mortgage.

There are random audits, and if you are one of the people who is randomly audited you might just end up in federal prison.

Then the irs could audit their bank accounts and look at their deposits and see if they match their returns.At the end of the day, its still super easy for these contractors to cheat.

In the chance I got audited, I would just need to show the ownership never really changed hands, just the way in which it is held.

Thank you guys, I had a look at the property yesterday and it is renovated recently with new windows and fire safety and city audit done just recently but overall the house looks creepy!