Not a CPA or tax professional.I’ve never audited every single line item of my S-Corp tax returns for over 18 years, and I’m truly curious why it really matters in one years instance, what corporate account was used to conduct business, as long as the financial information is accurate and correctly reported from said dedicated business account.This should be a separate issue from proper and legally correct business operations, ie a checking account with correct tax ID, no outside commingling of funds with self or other business entity.

I HIGHLY recommend paying for a CFO audit & having them set you up first. 

I got audited for 3 years. all of the above was thrown out.One example I had a business trip to London then to Tel Aviv. 

If the two of you were simply individuals owning the property as tenants in common and neither of you owned more than 50% of the entity then you could make the case that it was not a related party transaction.My fear is that if audited the exchange would fail due to the closeness of the related transaction. 

@Patrick Fanning - I think the advise you have gotten so far is pretty good (I'd recommend getting an energy audit from energizeCT). 

I always audit my receipts.

The IRS is very stringent on education and research hours, and have shown in several tax court cases that people who just "manage the manager" will not pass the audit.

In the case of an audit, not only do you have to prove that you did at least 100 hours but you also need proof from your vendors that they did not do more than you. 

They took it back and had is audited and redone by someone "whose been doing this for a long time" and when I got it back, the updated amount due was literally a fraction of what they initially stated (my taxes due were literally overstated by like $15k)But then, someone else reviewed it one more time and again, they caught something else they "missed" which changed my amount due again and it went up by another $4k or so.At this point, I've called in my old tax preparer and she's doing her own audit so that we can compare the 3 returns TS has given me with what she gets — which is another expense incurred for me. 

Under audit, if you don't have the time log for you and everyone else you will not be able to claim these losses.