https://www.ftb.ca.gov/businesses/New_Rules_for_Do...So if audited, CA will charge you the franchise tax fee regardless.  

He sent email stating what exactly happened and how he overpaid him but contractor keeps on saying there is no overpayment and he doesn't want to meet to review everything together, even though audit and our documentation clearly says we overpaid him.

If that is the case you have a huge potential problem if your exchange was ever audited to show a note and a mortgage (it doesn't have to be recorded but if not can be very easily perceived as fraudulent).  

Always get an environmental audit done.

The IRS generally agrees, and their audit guidelines specifically address a situation where someone own only a few rentals and tries to claim this status.And, as discussed above, that depreciation deduction is reducing your basis, which has the effect of increasing your gain when you sell.  

If you are an agent and your file is incomplete (no lead paint form) then the commission has something to say about it if they audit you.

Not only do you have to decide if a tenant makes sense for the strip center with other tenants and businesses but also if they go out how much anticipated TI will be needed to release the space.If the tenant business is failing 1 to 2 years in for example and they want a rent reduction you can demand audited financials from an independent company reviewing their records.

It may require several hundreds of dollars in fixing your previous returns, but it will be well worth avoiding the future headache of an IRS audit.

Maybe, if you don't get audited.

Maybe, if you don't get audited.