Be sure you are working with a CPA that understands the value of leveraging the tax benefits on investment property and working with an engineering-based cost segregation company with on-site property reviews and audit defense at no cost if ever needed during your ownership.

@Sonia Kulkarni1, yes, but the IRS may look at intent under audit.

Our last step is running a forensic audit of the company (S - Corp) and then we will write up the contract to purchase.

Having Audited financials completed on time.So how would you know?

I pay the extra 80 bucks or whatever it is for audit representation if it ever happens.

Any other cost seg software recommendations which doesnt cost thousands of dollars and provide audit guarantees? 

However, using STR in an attempt to qualify for crossing real estate investment expenses and depreciation over to your W2 income triggers audits.

How many current IRS audits or court cases are pending with S.

Not necessarily wrong, but they are not impartial.

If you got audited and had never made any efforts to rent it and just ran late or too long to sell, perhaps you would run into problems.I wrote about this is my blog - but here is the key part below. https://www.earlwhite.law/guide-1031-exchange-new-jersey/“Dealer Property” Not AllowedProperty held for resale (often called “dealer property”) cannot be included in a 1031 exchange.