Rental Property

[cpabsd]

A client purchased a set of 5 townhomes as one purchase.  For real estate tax purposes, it is treated as one property ( although listed as 5 houses).  For insurance purposes, there are 5 separate policies.  The purchase documents list all 5 addresses.  Would you set up as 5 different rentals or one?  If it matters, the entity files a partnership return.  

[Lee B]

Since we can't predict the future, I would set up as 5 different rentals, since that would provide more long term flexibility, record keeping wise.

For example, you could have significant fire damage in one unit. Obviously the fee for preparing 5 rentals would be higher.

[Slippery Pencil]

Is it one building?  Is he able to split and sell all 5 separately or can he only sell as one unit?