It may be difficult to obtain it afterwards.Ultimately, the IRS is putting the onus on you to help the tax system work better so everyone reports their income.

Yes it is.Download a Schedule E from the IRS website to give yourself a good idea of everything that is deductible against rental income.

FYI: An S corp is most commonly an election (form) you file with the IRS that changes how your LLC is taxed.

Have spoken with Fannie Mae, Freddie Mac, and the IRS on it. 

Hi @Joe BourguignonI don't think you can be on the note if only your friend was on the disposed property note, hi is the "owner" of the 1031 exchange funds.The purpose of a 1031 exchange, from the IRS point of view, is to allow you to transfer debt and equity from one investment property to one or more investment properties and this way you avoid paying Capital Gain taxes. 

It's like you're saying but a bit more complicated.True, there are components of the property that depreciate over a faster life5-year = Personal property (furniture, fixtures, carpeting, appliances, etc.)15 year + Land improvements (landscaping, pavement, fencing, etc.)BUT, according to the IRS it should be done through a quality engineering based study, otherwise known as cost segregation. 

I can live without the IRS part of it.This might be my favorite thread ever.

If you and your wife are the only members of these LLCs and file a joint return, the IRS is inclined to disregard them as separate entities anyways, so my previous point about corporate tax benefits would be moot, as all activities of these LLCs would be captured on your individual tax return, not a corporate return.If you haven't done so already, it could be worthwhile to explore this with a hired tax pro so you can get into all of the details of your situation to determine what truly is most tax advantageous for you.

If you'd like to hop in just shoot me a message with your number.

My accountant (CPA) said the IRS is cracking down on people taking trips and writing off some of the expenses.