10 Crucial Line Items That Trigger IRS Audit in Rental Depreciation Returns + How to Protect Yourself” — tailored to help landlords, investors, and tax professionals stay compliant while minimizing audit risk.
1. Improper Property Classification (Personal vs. Rental Use)
2. Inaccurate Depreciation Start Date
3. Incorrect Cost Basis
4. Expensing Capital Improvements Instead of Depreciating
5. Depreciating Land
6. Failing to Depreciate At All
7. Aggressive Use of Cost Segregation Studies
8. Unusual Year-Over-Year Changes in Depreciation
9. Omission of Form 4562
10. Improper Use of Bonus Depreciation or Section 179
🛡️ How to Protect Yourself (Summary Checklist)
✅ Keep detailed property records (receipts, contracts, photos, lease agreements).
✅ File and maintain Form 4562 and Form 8275 if disclosing positions.
✅ Review IRS Publication 527 (Residential Rental Property) and Pub 946 (Depreciation).
✅ Use a qualified tax professional or CPA specializing in real estate.
✅ Run a year-end depreciation schedule audit before filing.
✅ Consider cost segregation only when economically viable and properly documented.
✅ Don’t forget land allocation—it’s always non-depreciable.
Hope this helps! Let me know if you need anything else.
https://www.ghcpa.net/Contact-Us-Gerry-Horowitz-Certified-Public-Accountant/
This article is for informational purposes only and not legal, tax or financial advice.
es only and not legal or financial advice.
10 Crucial Line Items That Trigger IRS Audit in Rental Depreciation Returns + How to Protect Yourself” — tailored to help landlords, investors, and tax professionals stay compliant while minimizing audit risk.
1. Improper Property Classification (Personal vs. Rental Use)
2. Inaccurate Depreciation Start Date
3. Incorrect Cost Basis
4. Expensing Capital Improvements Instead of Depreciating
5. Depreciating Land
6. Failing to Depreciate At All
7. Aggressive Use of Cost Segregation Studies
8. Unusual Year-Over-Year Changes in Depreciation
9. Omission of Form 4562
10. Improper Use of Bonus Depreciation or Section 179
🛡️ How to Protect Yourself (Summary Checklist)
✅ Keep detailed property records (receipts, contracts, photos, lease agreements).
✅ File and maintain Form 4562 and Form 8275 if disclosing positions.
✅ Review IRS Publication 527 (Residential Rental Property) and Pub 946 (Depreciation).
✅ Use a qualified tax professional or CPA specializing in real estate.
✅ Run a year-end depreciation schedule audit before filing.
✅ Consider cost segregation only when economically viable and properly documented.
✅ Don’t forget land allocation—it’s always non-depreciable.
Hope this helps! Let me know if you need anything else.
https://www.ghcpa.net/Contact-Us-Gerry-Horowitz-Certified-Public-Accountant/
This article is for informational purposes only and not legal, tax or financial advice.
es only and not legal or financial advice.
