The city fire dept & an EPA guy will drop by unannounced to do an audit & I think he only got fined once for expired fire extinguishes.

It may not be over, the HUD still needs to be amended, the closer, and both brokers can have their files audited, they can all get slapped, it may also change your tax basis and it certainly changes tax issues for the seller.

I would keep one prior year at minimum. 3 is better in case of audit; however, I would not worry about too much beyond one year if you had decent records.I don't recommend outsourcing overseas.

What's your source document for the audit trail for taxes?

Specifically experience with Reg D, partnership returns and audited financial stms??

That buyer then 'sells' the property to the newly funded etc LLC.The only self dealing that could be construed would be the verbal, undocumented agreement to purchase the property from the initial buyer.This is exactly what we did @ a tax auction & it certainly passed scrutiny on the audit of us re-selling it 3 years later to another arms length buyer.

He says that the IRS is getting tougher in their rulings, and that 60% is probably better to avoid audit and negative audit determinations.So, I'm now paying myself 60% of my income as salary and 40% as distribution.Please don't construe this as advice on what you should do...I'm just relaying what my CPA is telling me and what I'm doing...

Also, how "defensible" is the intent were we to be audited?

Accounting, including auditing if required for your exemption as a security, distributions to investors, plus asset management all will take time and money to stay on top.

What additional liability does one assume other than the burden of auditing investors more thoroughly be advertising?