Questions to ask a CPA?

Tax, SDIRAs & Cost Segregation
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Questions to ask a CPA?

Keith Lutz
Real Estate Agent · Hackettstown, NJ · Member since 2011 · 206 posts · 62 votes

Since we are approaching tax season, and I am new to investing, I figure it would be a good idea to look/interview for a CPA?

Do you have any qualifying questions I should ask?

I figure one pre-qualifiying question would be if they have real estate investments themselves. Aside from that I am at a loss, any help much appreciated.

I remember seeing another thread, where someone said not to be too concerned with the CPA portion of those creditentials. Do BP'ers agree?

Thanks,
Keith

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Steven Hamilton IIPro Member
Accountant, Enrolled Agent · Grayslake, IL · Member since 2011 · 5k+ posts · 2k+ votes
14y

Keith,

I have compiled a list of questions that you can select which are most pertinent to your situation:

What was the most recent CE course you took and when?
What subject is/are your academic degree(s) in?
What is your specialty (tax accounting, tax representation, etc.)
How long have you been practicing?
How many clients do you have?
What percentage of your practice today is in real estate?
Have you represented clients in front of the IRA, and what is your success rate?
Will you share a reference(s) from your current client who runs a business similar to mine?
Will you share a reference who can speak to your representation before the IRA?
How can you or your professional network help me with entity structuring, retirement/estate planning, business analysis, etc.?
Help you define the appropriate business structures, both from a legal protection and from a financial/tax perspective
Help you create a tax strategy for your business that will allow you to legally keep as much money as you possibly can
Help you make smart decisions with respect to your individual real estate investments
Prepare your annual tax returns
Recommend other team members (attorney, insurance agent, real estate agent, etc) who can help make your business a success
What are your credentials?
What services do you offer?
What areas of tax and accounting do you specialize in?
What is your background and do you personally own real estate?
How would I be able to communicate with you? Can I get questions answered by email?
Given my circumstances, what business structure(s) do you recommend? Why?
Can you register the business structures for us?
How can you help in the various phases of real estate investing (acquisition through sale)?
Do you specialize in tax strategy? Specifically geared towards real estate?
How aggressive will you be in helping us keep as much money as possible?
What tax strategies/issues should I be aware of upfront?
How often would you suggest we meet to review our progress/plan?
Do you do tax preparation?
What software do you use (and expect me to use) to do our accounting?
Can you help me find other team members (attorney, insurance agents, real estate agents, etc)?
What is your schedule of fees?
Do you have references?

Some of the questions are duplicated in here for the reason of asking them a different way for a different response.

Also here is a link to another similar discussion we had on this topic (it is some very good reading): http://www.biggerpockets.com/forums/51/topics/63679

[email protected]224-381-2660
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  • Eamonn McElroy
    Accountant · Atlanta, GA · Member since 2015 · 1k+ posts · 1k+ votes
    7y

    @Ryan Kuja I imagine it depends on how many White House Honey Ales he's had.

    0Reply
  • Ryan Kuja
    Rental Property Investor · Holland MI · Member since 2014 · 79 posts · 27 votes
    7y

    Ha ha :) You're right. That would be the deciding factor. I like the way you think!

    0Reply
  • Account Closed
    Rental Property Investor · Lake Mary, FL · Member since 2018 · 1 post · 0 votes
    7y

    Being recently divorced my accumulation of investment properties and assets has obviously suffered, looking to start building up again and having a hard time deciding the best course of action for funding the purchase. Ideally looking for properties with rehab and high ROI opportunities but not to rehab and flip, I would like to rehab and hold (rentals). If the numbers makes sense is it advantageous to refinance after rehab and use cash for another investment? Is it better to borrow from private lender or hard money and refinance when term is up each time that way?

    0Reply
  • Eric Feng
    Real Estate Agent · Atlanta, GA · Member since 2015 · 31 posts · 10 votes
    7y

    I'm in the same situation as @Mora Clark, owning just 1 property under my name. I wonder if it's worth it to just do tax a planning session with a tax accountant. After all, you don't know what you don't know. By talking to a professional, I assume that they can help you plan a road map, on how to structure the business?  

    I'm also doing my research on this topic. Plan to do my own taxes for 2018, but I'm also considering talking to a tax professional now to do some tax planning, as I'm foreseeing my tax situation gets more complicated for 2019 & 2020.

    Although I can still somewhat do my own taxes now, I am unsure of what documents to keep and also whether my current plan will maximize my tax deduction. Also I'd like to have the right and needed documents ready to hand off when the business gets bigger and more complex. Without planning ahead, I can foresee a lot of missing documents and headaches.  Anyone have any experience in this or have good suggestions?

    0Reply
  • Kathy Harrison
    Member since 2019 · 1 post · 0 votes
    7y

    I am searching for a line of questions that are directed toward investing that I should ask a CPA here in TEXAS.  I appreciate any assistance.

    0Reply
  • Steven Hamilton IIPro Member
    Accountant, Enrolled Agent · Grayslake, IL · Member since 2011 · 5k+ posts · 2k+ votes
    7y
    Originally posted by @Kathy Harrison:

    I am searching for a line of questions that are directed toward investing that I should ask a CPA here in TEXAS.  I appreciate any assistance.

     No different than the above list of questions

    [email protected]224-381-2660
    0Reply
  • Nicholas Moran
    Rental Property Investor · Jamaica, NY · Member since 2018 · 51 posts · 7 votes
    7y

    hello, I'm going to be a single property owner soon I have a property under contract from 2018 and I've done my own tax with turbo for the last 3yrs. What year should I deduct home inspection for this property 2018 or 2019?

    I should be closing within the next seven days. I never own a property before so I don't know if its going to be complicated going forward.

    Thanks

    0Reply
  • Steven Hamilton IIPro Member
    Accountant, Enrolled Agent · Grayslake, IL · Member since 2011 · 5k+ posts · 2k+ votes
    7y

    You will want to consult with an accountant. It is safe to say you have moved passed the DIY point. Depreciation, loan costs, placed in service dates are all dependent upon facts and circumstances. 

    The home inspection itself is not a 100% deduction it is a part of the basis of the home.

    [email protected]224-381-2660
    0Reply
  • Gita FaustBusiness Member
    Accountant · Richboro - Philadelphia, PA · Member since 2008 · 901 posts · 246 votes
    7y

    Keep it SIMPLE

    Real estate is a business, not a hobby. 

    Anything you pay for a property is deductible. 

    Anything you pay for building your real estate venture is deductible.

    1Reply
  • Steven Hamilton IIPro Member
    Accountant, Enrolled Agent · Grayslake, IL · Member since 2011 · 5k+ posts · 2k+ votes
    7y

    Please stop giving incorrect advice there is a difference between something that as a deduction in something that is required to be capitalized. Not all rental real estate is a trade or business. 

    [email protected]224-381-2660
    2Reply
  • Natalie KolodijBusiness Member
    Moderator
    Tax Strategist| National Tax Educator| Accepting New Clients · Member since 2014 · 3k+ posts · 4k+ votes
    7y
    Originally posted by @Gita Faust:

    Keep it SIMPLE

    Real estate is a business, not a hobby. 

    Anything you pay for a property is deductible. 

    Anything you pay for building your real estate venture is deductible.

    Gina again there are way more elements to it than this. 

    Lots of things related to rentals aren't immediately deductible. Capitalization and Amortization exist and there are very specific tax rules related to them.  

    Pleas stop providing vague tax advice that's not correct information. Its' not going to help people who came to BP looking for guidance. 

    What you're doing in the books, is not the same as what we're reporting on their taxes. 

    Podcast Guest on Show Pay Less Tax to the IRS This Year With THESE Real Estate Tax Strategies
    Kolodij Tax & Consulting
    WebsiteView Page
    0Reply
  • Gita FaustBusiness Member
    Accountant · Richboro - Philadelphia, PA · Member since 2008 · 901 posts · 246 votes
    7y

    Thanks for pointing that out. I did miss it and I just updated it. I am not giving any tax advice in any of my posts. I am merely stating the fact that an investor should organize their financials so they can get tax advice and strategy. 

    If you are an investor and renting, you should consider your rentals and manage them as if you are running a business, tax implication could be different. 

    I agree 100% with you "What you're doing in the books, is not the same as what we're reporting on their taxes." 

      @Steven Hamilton II @Natalie Kolodij

    I am not giving any tax advice, I leave that to the experts. 

    0Reply
  • Samantha Smith
    Fort Polk, LA · Member since 2019 · 20 posts · 5 votes
    7y

    These seem like great questions to ask but without knowing what a good answer is how would you even gain anything by asking? For example, how do you research what classes or credentials they should have taken or should have so that you know what you are looking for in asking these questions?

    1Reply
  • Monica Soyemi
    Real Estate Agent · New York City, NY · Member since 2019 · 36 posts · 15 votes
    3y
    Quote from @Greg B.:

    Not all CPA's are the same. I had one CPA that was an older, knowledgeable, nice guy. However he was not real aggressive. I wanted someone like Diane Kennedy.

    I found another, more aggressive CPA but he was in another state. Getting feedback from him was difficult.

    Last year I found a young, local guy. He asks me good questions and sends me updates about the laws periodically. I like him so far.


     Hey Greg, are you still liking that CPA?

    2Reply
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