Can I have 2 different accountants?

10 Replies

  I've had the same business accountant for almost 15 years. Knows my business inside and out, does my personal taxes as well, and I trust him with his decisions on my taxes.

  In the last 2 years, I've added a commercial property, and 7 residential properties, and I would like to add a lot more. I know my accountant isn't a "specialist" when it comes to rentals and property. He could certainly get the job done, but I'm wondering if I could use real estate accountant for my properties, and keep the same accountant for business and personal. Then combine the tax stuff at years end.

6 of the 7 residentail properties are in an LLC with a partner, with the other being my own. The commercial property I have a partner in a separate LLC also. And the business (acutally 2) is two different entities as well.

Hi Andy, 

It's definitely possible- but it is always a little bit tricker. It means neither accountant sees the big picures with full transparency and it can make it a little hard for planning and such. 

That being said- If your current accountant is open to being in communication and working as a team with a REI accountant that would definitely help things!

Hope this helps!

Are you referring to CPAs or regular in-house accounting for your real estate?

@Andy W.

I work with four in total --- so the short answer is yes. Now whether you should do so depends on the circumstances. In your scenario, I would say it may make sense to do so. If you don't want to hurt your old accountant's "feelings," I would just tell him that after discussing the situation with your partner, you both felt it would be better to have a separate CPAs for the rentals than the main CPA that you both use. 

Disclaimer: While I’m an attorney licensed to practice in PA, I’m not your attorney. What I wrote above does not create an attorney/client relationship between us. I wrote the above for informational purposes. Do not rely on it as legal advice. Always consult with your attorney before you rely on the above information.

You can subcontract out your new deals after getting your 15 year CPA'as endorsement.

Con - as discussed; you may have to repeat your year's activities to both CPA's.
You may have an overall larger bill from both professionals.

Pro - You may be working with two different specialist. One who understands real estate taxation and the other who understands individual taxation?
Another pro can be that neither accountant will likely increase the bill to you from year to year in fear that the other accountant can steal the business.

Originally posted by @Simon W. :

Are you referring to CPAs or regular in-house accounting for your real estate?

 CPA for year end taxes and help with some decisions throughout the year. 

Have you considered using a RE bookkeeper?

If you trust your CPA already, it may be better to let them continue to make tax decisions and instead have a bookkeeper that keeps all your financial ducks in a row on a monthly basis. That way you can strategize in the event that you want to 1031, refinance, etc., and you can bring that plan to your CPA for their seal of approval so they’re still in the loop.

I’m definitely pro 1 tax accountant, but having a dedicated RE team is never a bad thing.

The advantage of having an up-to-date RE accountant, is that they can help you strategize utilizing tax benefits, that a non-specialist may not even be aware of. As you grow your portfolio, this may handicap your investing potential. 

Take for example accelerated depreciation (cost segregation). Many non-RE specializing accountants, and even many "RE specializing" accountants are not utilizing this cash-flow mechanism for their clients; Thereby, causing unnecessary tax liability. 

@Andy W.

I use several CPA's based on their expertise and location. I have multiple businesses that obviously feed into my personal taxes. Based on the type of business and states you work and live  in it may make sense to have more than one. They all work well together and have my best interest at heart. they understand and appreciate the rationale.  

Create Lasting Wealth Through Real Estate

Join the millions of people achieving financial freedom through the power of real estate investing

Start here