In the documents they list along with a property,  they do provide some information regarding outstanding mortgage.  

You should be documenting each incident of smoking, and any other incidents which violate the lease.

The thing about the IRS is all they care about is documentation and applying the tax code correctly.

I'd recommend 2 steps:1) Prepare some simple documents (clear and concise) that describe who you are and what your RE investment strategy is.  

If you have a partner somewhere you need to document your operating agreement.

Internally, this means they can document the business account requirement as in place to "facilitate that annual audit" of the business, and not as a high pressure cross-selling technique, in order to have their ducks in a row in case THEIR books are audited, and there potentially might not be a thing you could do about it. 

But, based on blog posts and info products from Seth Williams, there's another piece: He said most states have a "supporting documentation" form (the name is not consistent) that tells the city or town the property is associated with that the transaction has occurred, and it essentially allows them to adjust who the tax bill will go to.

if yes, please document with practical guidance steps and needed documents.Thanks.

The only way you are going to prove anything is if you happen to have a picture or some other documentation from when you purchased the place that the damage didn't exist at that time.  

fractionlization is legal in some states not legal in others.. check with you attorney first... if legal then the investors each take title as to their % of beneficial interest... and its clearly denoted on the mortgage or trust deed or deed to secure debt  depending on what document is common in your market.