I did actually point out to the loan officer (lol) that according to Fannie guidelines they can accept current year earnings as long as you can show an audited profit and loss showing the good numbers they want to see.

I know loans are not taxable income, but I'd like to avoid getting audited.

That "not responsible for stuff".Audit the minutes and books of the company, audit operational and any escrow accounts, it's better to leave some money on hand and pay for it, keeps accounts open.

I would talk to your CPA because in the event you are audited, they are the one that needs to explain.

Here is how you catch them …   When you and your Property Manager are doing the walk through and Lease Audit, make sure you review the Tenant Screening Procedures on each and every Tenant.

I have never seen an IRS audit because the IRS refigured your accumulated depreciation based on your original purchase.

IRS has an Audit Strategy Guide you can download (I think its the "Construction Industry" one) that explains it as well, more or less.

Audit any agreements you have that go off of a calendar year?

What the IRS requests during an audit may differ.I am equally certain there is probably a fine line between "contract labor" and "casual labor".

I'm a CPA myself (audit side) who moved into private industry in 2010.