I'm looking for a new CPA this year to help utilize tax advantages. I own one multi-family real estate property so there isn't too much required but I would still like to start building a relationship with a solid CPA. My CPA now is fine but I'd like to find someone who is more real estate-oriented and understands the space a bit more. What qualities do you look for in a good real estate CPA? Any recommendations for the Manchester NH area would be fantastic. thank you.
Accountant · Austin, TX · Member since 2016 · 72 posts · 72 votes
3y
Primarily, I would just recommend looking for a tax professional who specializes in doing taxes for real estate investors. There are some generalists CPAs/EAs who know how to correctly handle taxes for real estate investments, but unfortunately the majority don't. If you have long-term rentals, the most common misconceptions are generally around properly calculating depreciation (proportioning the value for improvements vs. the land, which isn't depreciated, and also including applicable closing costs in the depreciation/amortization). And understanding when real estate losses can offset other types of income, and when rental losses can qualify as non-passive. If you have short-term rentals, then the common misconceptions really multiply, including using the right depreciation period (39 years), using the right schedule (it's generally still E, not C), and considering if a client qualifies for the "STR loophole" (most generalists typically won't know about that option at all). They should also be able to help with advising whether a cost segregation study or other accelerated depreciation strategies make sense in your situation.
Those are the kinds of things I would ask about. I specialize in taxes for real estate investors, and so do a lot of the people you see posting in the forums here. I'm in Texas, but a lot of us work with investors in all parts of the country. If you're only wanting someone local, that does significantly limit your options, and there may not necessarily be a real estate specialist tax professional in your area. But you can try doing some Google searches and also looking through the posts and other info here and it's always possible there may be someone.
Specialist · West Palm Beach, FL · Member since 2008 · 4k+ posts · 1k+ votes
3y
@Thomas Bullock I would say a lot of it is based on their training or their resources that they utilize to complete your taxes. Here are some questions that I would typically ask a CPA:
Are you experienced in working with my industry? Do you know the ins and outs of it? How long have you been working in the industry?
Do you work with any specialty tax firms to help us small business owners get access to R&D tax credits, cost segregation and other specialty tax credits?
Do you meet with us routinely to be proactive and do planning?
What real estate tax saving strategies have you utilized with other clients?
I've found that CPAs that focus on a niche area such as real estate rather than offering general services to everyone are typically much more knowledgeable about real estate tax incentives.