BiggerPockets

I would recommend using a CPA...we started immediately to not only ensure we did not make any crucial errors, but that we minimized our taxes paid. You should be able to find a good CPA that will review your books and prepare your taxes for a price that will be well worth it in my opinion. I am sure investors in your area can chime in with recommendations and going rates.

Bienes,

I'm like you for about 5 years I've done my own taxes with Turbo Tax. However, I'm onto my 4 rental unity and decided to get a CPA this year.

Reasons for this:
-I asked my boss, that is a developer and multi business owner, what do you recommend a good lawyer/cpa? He said "CPA because they deal with your money and tax structure. A good one will have lawyers they work with to structure your business in the most tax beneficial way. Trust me I'm made some business decisions before consulting my CPA and ended up paying more in taxes when real I shouldn't have."

- Pay people what they are good at. A CPA is good at taxes, I'm getting better at finding RE deals. The less time I spend doing taxes the more time I can spend with the family or looking on the internet for deals.

-Some of my rentals I may not hold long term. Would like someone to give me my best options when selling as it pertains to tax strategy.

-I plan on moving into not just rentals but also wholesaling/flipping maybe 1 or 3 houses a year.

- I can call my CPA for advice before I make decisions to know the tax implications.

I'm an accountant (will be a CPA by summer) at a CPA firm and I'll tell you that if you are in business, especially real estate, a CPA is worth the fees. Taxation, Basis tracking, etc all get confusing for the non-accounting types.

The thing about business taxes is you may think you are doing everything right and not hear back from the IRS, but you could be doing things completely wrong for years and get stung at the end by surprise. It's more of a preventative measure really. Also, tax planning involves an entire look at your financial picture and goals so it's really important to have someone who knows the long and short term impacts of decisions at your side.

Don't forget our fees are also deductible as business expenses the following year.

If your CPA doesn't have the heart of a teacher and isn't willing to sit down and explain things to you in plain English then move to the one that will. Good luck!

One value of using a CPA, that has not been mentioned above, is when you go to seek financing. The lender will have much greater faith in your accounting practices when they see that you have employed a CPA.

I remember early in my career when I was attempting to find a knowledgeable accountant. When I was interviewing accountants I would always ask one simple question-what did you pay last year in income taxes? If they refused to answer, I felt they were embarrassed with the amount they had paid. If they gave me the amount that they paid and it was more than what I had paid why on earth would I want them to do my taxes? I was quite confident I was earning more than they were so their taxes should of been less.

I do agree with previous posters that you definitely need an accountant. Unfortunately, in my opinion, most of them do not understand real estate. Rich

I am on the hunt for a great CPA.One who understands real estate investing and planning.

Preferably in Cherokee county Georgia or surrounding counties.

1041 is the exchange of property between spouses. Here is the IRC

(a) General rule
No gain or loss shall be recognized on a transfer of property from an individual to (or in trust for the benefit of)—
(1) a spouse, or
(2) a former spouse, but only if the transfer is incident to the divorce.
(b) Transfer treated as gift; transferee has transferor's basis
In the case of any transfer of property described in subsection (a)—
(1) for purposes of this subtitle, the property shall be treated as acquired by the transferee by gift, and
(2) the basis of the transferee in the property shall be the adjusted basis of the transferor.
(c) Incident to divorce
For purposes of subsection (a)(2), a transfer of property is incident to the divorce if such transfer—
(1) occurs within 1 year after the date on which the marriage ceases, or
(2) is related to the cessation of the marriage.
(d) Special rule where spouse is nonresident alien
Subsection (a) shall not apply if the spouse (or former spouse) of the individual making the transfer is a nonresident alien.
(e) Transfers in trust where liability exceeds basis
Subsection (a) shall not apply to the transfer of property in trust to the extent that—
(1) the sum of the amount of the liabilities assumed, plus the amount of the liabilities to which the property is subject, exceeds
(2) the total of the adjusted basis of the property transferred.
Proper adjustment shall be made under subsection (b) in the basis of the transferee in such property to take into account gain recognized by reason of the preceding sentence.

-Steven The Tax Guy

Your Guide to the IRS laws, rules and regulations

The truth in this post is that not all CPA's deal with taxes. Many do audits, compliance, compilations, controllers, are CFO's, are CEO's, or do all other aspects of business.

If you go to a smaller, local practice then chances are they aren't touching many audits and the lions share of their practice is taxes and tax planning. Some even merge practices with Tax Attorneys for the tax and estate dream team.

I'm not sure I would compare a CPA to an EA. They aren't even on the same level. A CPA can do all the work an EA can do, but an EA can't do half the work a CPA can do. Just look at the CPA exam vs the EA Exam.

That said, an EA would probably do just fine for tax preparation only, but I'd much rather have my financial statements and books compiled by a CPA and since he's already got that intimate knowledge of your financials he (or she) can do the tax work too.

I'm not bashing EA's, but I'm not sure comparing to a CPA is even in the same ballpark. Most EA's work for outfits like Jackson Hewitt, etc. (not bashing them if you use them)

If you're a real estate investor you will have long term tax planning issues, likely financial statement compilations for lenders, multiple partnership returns, and some pretty complicated books. If you can find a CPA who also invests in real estate himself, that's the ticket, IMO.

I'm a rookie Accountant, someone like Charles Perkins would be your best pick.

Pretty bold assumption there. Many of the CPA's in my area, especially the firm owners/partners, are involved in all sorts of other businesses. One in particular comes to mind that still works his tax practice but owns a few hotels and a couple storage units. From the outside he looks like the humble, frugal CPA with his older used pickup truck, but he's killing it under the radar. In my experience this seems to be the norm, rather than the exception. Most CPA's are frugal but heavy investors and not very flashy so it can be deceiving.

Let's not get carried away here. Most? Really?

CPAs are very good at certain things, but I would not say that MOST CPAs are heavy investors or even good investors. If they were they wouldn't be selling their time for dollars. They would be directing their capital to the best deals around.

The CEO of our fund is a CPA. I would say he is really the exception rather than the rule though.