Peer Street struggled with Underwriting, collecting payments, and the math that an accounting firm calls audited while from the outside everything looked pretty. 

If you have some sort of a print out from your own bookkeeping and your closing statement from when you bought it if it was in the past year, or last years tax return if you claimed it last year for the duplex it would be really simple for them to add it onto this years return and your whole return would likely be like $500 and would be covered by their audit guarantee.

(they are open to increasing this limit but not without an audit of your infrastructure) . 

from what i see you have to spend a certain amount of time per year in the bizz and i mean really in the bizz.. this is probably an audit trigger as well.. so if you get audited you need very detailed supporting documentation.the Advantages of course are for the many write offs that being in the business affords us.acquiring a RE license and actively work in the industry usually is the easiest and safest way to claim these write offs.

Although you might have an argument it's not something I'd bet on in an audit. 

You don't want to make a big mistake and have to unwind it years later or worse face an audit.

In your case, since you reduced the reported amount on the 1099-S to reflect the actual amount you received after the payment to the program, you might want to have the documentation from the county's request readily available.While it's not mandatory to submit the documentation with your tax return, having it on hand can be helpful in case of an audit or if the IRS requests additional information.

If we are talking about partnership return, and you didn't/couldnt not elect out of partnership audit regime, you cannot just amend your return and you have to file AAR. 

If I started an LLC and used NAICS code 531390, the IRS would keep a closer eye on my company and I have a higher likelihood of being audited VS. me not having an LLC...

I don't want to waste time filing each period if it's not necessary, but I also don' t want to have to deal with audits and penalties if it is.