Kristine Marie PoeI'd say you're right, except that closed transactions show up in audits after closing, it's not the closing agent responsible for such matters but the selling broker.......in their absence, the seller.

The QBI deduction is only allowed if you are a "trade or business", and the tax courts have resolved that rental real estate is a trade or business.However, @Vince Mathis if you are simply a passive investor in real estate and you do not claim the QBI deduction, then you don't have to issue a 1099.Keep in mind that if you don't issue a 1099 and take the QBI deduction, then you run the risk of the IRS auditing your tax return and claiming that you deducted the QBI erroneously, and charging you back taxes and penalties.When it comes down to it, you are paying taxes, why shouldn't your contractors pay taxes? 

I'm certainly not an accountant and would defer to those here on BP.Rob K-I do pride myself on paying very little in federal income taxes and I showed several letters of communication with the IRS on previous audits in the bigger pockets summit last year and also in the center of my book.There are several ways of deferring income tax and additional ways to significantly reduce the amount due.

#1: Actually audit expenses.

You're CPA is setting you up for failure and an audit.

It's just good practice to have a dedicated bank account because, heaven forbid, if you ever get into a lawsuit and need to provide records, or you get a letter from uncle sam to audit you......Plus it'll save you time when you want to run the numbers to see how well you're doing on the property.

Don't be reactionary with upgrades, do the energy audit and plan updates accordingly on your timeline and budget.

That is the point of acting as a licensed agent to begin with.The job of these promotional companies is to be transparent and make sure investors know they are not impartial.  

Please,  prove me wrong  with long term audits.  

  :)Cash just makes it a little harder to document the payment if you're ever audited.