Timing and documentation are everything there, and that determination usually drives when and how it’s deducted.On audit risk, the dollar amount alone is not the problem.

This is one of those scenarios where having clean support in case of an audit is huge; that’s actually why I use automated tools not flashy, just solid backup when you’re pushing into gray areas the right way.

Start by vetting property managers before realtors since management quality drives performance, audit risk, and expense substantiation.

Sure, you can be comfortable with the strategy itself and its implementation, but we stress the importance of creating a DEFENSIBLE strategy in the event of an IRS audit, allowing you to KEEP the deductions you received and ultimately providing you with confidence when your return is filed.Also, the more detailed your time log is, the easier it is for a tax advisor to review and point out what hours will stick when an IRS agent takes a look at your log.Things you can consider to add to strengthen your time log: Screenshots of time spent on calls with contractors/cleaners/etc.Pictures of work you are completing (i.e. painting)etcChris Tile, CPA

I do what my experts tell me is allowed to help reduce the odds of audit but also so that if I get audited I do not expect crazy adverse findings.  

The GENIUS act did a few things; auditing controls, tracking/surveillance rights, compliance programs and a mandatory 1:1 reserve. 

I’ve found automated tools more helpful for sanity-checking whether the depreciation strategy actually lines up with REPS/material participation and audit risk, rather than chasing paper losses that don’t fully stick.

The other key is to record it on the same day ("contemporaneous log") as opposed to reconstruction at the time of an audit.

The methodology is rules-based and consistent, which is what matters for audit defense.

Ask about their audit defense - do they stand behind their work if questioned?