The IRS is primarily concerned with the final allocations, not the cash flow logistics between partners

Have discovered many lease fraud issues over the years.2) Rent Rolls: seller probably collects a lot of rent in cash, which they then try to hide from the IRS.

@Jay Hinrichs the goal of issuing tax is not because we have any expectation of them paying it but rather weaponizing the IRS against tenants who cause landlords problems 

I have an LLC in the works with the state and am also filing for my EIN with the IRS and need to find someone to help me maximize tax savings.

The 750 hour requirement is a high bar; it’s essentially a part time job, which can be tough to meet with just two properties (also high audit area and need meticulous records).Also worth highlighting: time spent by others (like property managers) doesn’t count toward your hours unless it’s under your direct supervision and incidental to your own efforts (per IRS regs).

The IRS only taxes you on the amount that exceeds your adjusted basis in the property.2.

The IRS allows you to deduct rental expenses and depreciation whether the property is held in your name or in an LLC—as long as it’s used as a rental business.Here’s what you need to know:Tax Benefits You Can Still Claim PersonallyEven without an LLC, you can still claim:Depreciation (including cost segregation and bonus depreciation if applicable)Mortgage interestProperty taxesRepairs, maintenance, insuranceTravel, utilities, cleaning, furnishings, supplies, etc.If you materially participate and meet the STR exception (average stay ≤ 7 days and 100+ hours of active participation), the income is treated as non-passive and losses may offset your W-2 income.

@Patrick Shep, One of the requirements of the 1031 exchange is that the taxpayer for the relinquished property has to be the same taxpayer for the replacement property.The way the LLC is structured would determine if this would work.

IRS Publications are fine for basic tax questions.

The IRS doesn’t allow you to deduct personal living expenses, even if you perform the work through your own LLC.You cannot bill yourself through an LLC and claim a deduction.