Question For CPA’s Who chose RE Tax

8 Replies

Hello everyone,

I recently graduated college, with a Bachelors in Accounting. I am also taking a Masters program that will allow me to sit for the CPA Exam. I have a huge passion for investing in real estate and I think specializing in real estate tax would be extremely beneficial for me.

My question is how would I 'specialize' in real estate tax? I would love to own my own tax business one day where I could help other real estate investors with their taxes, and questions or concerns. I am extremely excited to hear feedback from other CPA's on BP, on ways I could gain more knowledge or learn how to specialize in this particular field! Thank you in advance!

Study study study. What you don't know CAN and WILL hurt your clients. Carry good E&O. Tax is something you truly should have a mentor in. I'd recommend getting industry experience under someone before going solo. It is not for the faint of heart. It can be a very stressful field. I've been in business a long time and I'm still learning new things.

You need to be able to research. If you don't know how to do research tax is NOT a field for you. 

@Jordan McNelly

If you just recently graduated college chances are you won't be starting your own practice in the next few years so I'll focus on the pertinent advice...

Research the CPA firms in your locality and/or localities that you would like to end up in.  Big 4 firms are great but usually you won't get wide breadth of experience with them (e.g. you may be pigeon-holed into doing fixed asset detail for a single Fortune 500 company year-round, etc).  I would look for smaller to medium sized firms -- especially ones that have a lot of clients in real estate.  Make sure they know you're interested in real estate income tax compliance before you start working and after.

Agree with @Steven Hamilton II that you need to be very good at researching and finding the answer on your own -- the correct and holistic answer -- without anyone's help if you intend to open your own practice.  Because -- you probably won't have anyone's help most of the time in the beginning.  You should also be a self-starter and passionate about tax and saving your clients as much as is possible.

@Jordan McNelly I would follow the advice of @Steven Hamilton II & @Eamonn McElroy . Most of the CPAs that I know that have successful practices started with one of the Big 4 or other large firms. I don't know if that's necessary, because one could get lost in such a big firm, but it defiantly puts a lot of things in perspective, and it gives you exposure to people who have been in whatever field you are looking into, with tons of experience. Apprenticing is so important. I would also try following some of the CPAs her on BP like @Brandon Hall @Daniel Hyman @Michael Plaks and more, who provide many different ways of looking at things, which teaches you, there is never really one 'right' answer.

@Jordan McNelly

Funny how you asked about becoming a CPA, and I'm the 3rd EA who is answering you, no CPAs yet.  :)

You can start your own firm immediately. I did. But I would not recommend it and would not do it myself if I was to  start over. Too hard.

Real estate taxation is very complex, and you cannot learn it from reading books and following online forums like this one. It helps to keep you sharp and expand your knowledge, but not to learn the fundamentals. 

Best is to learn from someone who knows it. That means getting hired by a small tax firm that works with real estate investors. And attend all REI events and webinars that you can, until you can speak fluent real estate.

Originally posted by @Eamonn McElroy :

I hate to burst your bubble @Michael Plaks, but I am a genuine actively licensed CPA, not an EA.  ; )

Happy 4th everyone.

 That explains why we seldom agree on things :)

I also am a CPA, I highly recommend working in Public Accounting to gain exposure to a multitude of tax scenarios before hanging out your own shingle. You may want to have a majority of RE tax clients, but being able to help anyone who walks through the door or is referred to you will be the most beneficial if you plan to own your own practice. Working at a firm with 50-100 employees would probably be the sweet spot where you may even be able to work exclusively on RE clients. I highly doubt it though. I work at a small firm of around 25 and we have a large diverse client base and only a couple dozen are RE focused clients. Getting an internship might be a logical first step and then showing employers that you have the ability to sit for the CPA exam would be the next step. 

@Jordan McNelly

Congrats on recently graduating!

I agree with many of my colleagues above.

I worked in small, medium and big four accounting firms.
I think medium sized accounting firms is the sweet spot. You get exposure to a lot of different experiences yet be able to have the opportunity to specialize in one specific industry.

Big four - Great on resume but you are working on a small part of a client's tax business. You will either just do the federal return(no state return experience) or just do depreciation and have no experience with the other part of the return.

Small companies - all small firms are different but most likely their client's industry base is broad and as a result you may not be working on real estate clients 100%.

You may want to see if you can be an employee of a CPA/EA firm that is active on Biggerpockets.