., time spent on guest communications, cleaning coordination, repairs, marketing, etc.).Proper documentation not only supports your position in the event of an audit, but it’s also essential for meeting the IRS thresholds for material participation under the STR exception.happy to help.

If lower than market price, and this is an audit lottery. if you claim business rent, then must show rent income. can claim the deduction of utility etc... as well.

Not following the rules can trigger audits or penalties.Business expenses: Just because something seems “business-related” doesn’t mean it’s fully deductible.

@Josh Lewer really appreciate you taking the time to share such a thorough breakdown and even pulling in excerpts from the IRS Audit Technique Guide — that’s a wealth of information and I’m sure it’s helpful for anyone following along in this thread.Just to clarify the lens of my original question: I was thinking more from the perspective of an investor who is personally handling the day-to-day operations of their rentals (rather than delegating to a property manager).

Will they defend my report in an IRS audit?

You'd want to do a return on equity audit to see how much you're generating from the property.

Additionally, I can help incorporate receipts and statements directly into transactions for added assurance in case of an audit.

The most valuable thing is having an auditable, automatic record you can point to if you ever end up in court or refinancing.

Having gone though an audit from the IRS myself, I cannot tell you enough times how happy I was that I had one.

Im involved personally in other similar syndications and they are doing well with positive monthly returns and real audited financials that show year over year gains.