The fact that the property is being flipped frequently gets caught late in the game by the lender (frequently in a quality control audit just before going to documents) which can burn a lot of you valuable time available under your purchase contract. 

I think that is critical.. especially if your audited if they have been doing your work for many years they will be easly able to defeat an audit. 

It was usually due to a disgruntled independent contractor, or failure of the employer to file unemployment tax returns, and the agency came in and audited.  

If your intent when you bought it was to hold for productive use then it is qualified property and you can 1031 it.You'll want to make sure that you have your documentation and demonstration of intent ready if audited.  

ü The establishment of an internal or third party independent audit function to test for compliance.

Vote that night to hire professional management company. 6) In the mean time, don't expect much by the way of meetings, data and budgets. 7) Board decisions cannot be made via email and board meetings need to be publicized to the owners (the sunshine law) unless you the board is in executive session. 8) Any savvy buyer will see that the board members are serving the same positions, that there are no minutes, no reserve studies, no audits, no financials, etc. that's if this lady responds to an agent or buyer with a resale certificate!

Yes, if you choose to do this, you will need to learn about w2, taxes, insurance costs, time sheets, audits, all that good stuff of being an employer, which the insurance agent should be able to provide.

I have no problem signing on this behalf but just want to make sure I can legally do that without raising a red flag to the real estate commission if audited.

It would not be an easy audit, but as long as you can make the argument and support it with documentation such as emails, correspondence, faxes, etc. you would qualify.

The question is how do you treat and report a sale, exchange and subsequent purchase when the legal ownership differs from how you have been treating and reporting it for income tax purposes and would the IRS or state audit agency agree with that.