All initial audit findings are required include with a management response at the time of filing of the financial statements – work with your auditors to craft the correct responses to the findings. There should be a plan in place for correcting any kind of finding. As long as the finding is not repeated in the following years, there should not by any issues.

Each mortgage issued by HUD will have a regulatory agreement that is required to be followed. Any type of mortgage issued by a regulatory agency will have some compliance requirements listed within the mortgage agreement. Further review of the mortgage documents will reveal all compliance requirements, or work with your representative at the applicable regulatory agency.

All distributions, income and expense allocations should be defined within the partnership agreement that was signed when the partnership was established. Work with your income tax preparer to determine the proper accounting for tax purposes.

If there is a gain on the sale of the real estate, it will be taxed as capital property. If the gain is deferred, (1031 Exchange), then any gain on the sale of the property will be added to the basis of any like-kind property purchased in the required time frame. (See 1031 exchange requirements.) Consult with your tax advisor or CPA to assist with implementing the requirements for a 1031 exchange.