Hire a tax pro.. but in which state?

Question

I live in California and own a rental property in Georgia. In California I work in IT and that's where most of my income currently comes from (W2). I am also a licensed real estate agent in CA and occasionally have income from that source (not a ton). My wife and I now own a rental property in Georgia.

We are definitely planning to hire someone to do our taxes going forward, but in which state? Most of our income is in California but that income is pretty simple for filing purposes. Our rental income is small (hopefully it grow), but for tax purposes that would be the more complicated one for filing. So here' my question; does it make sense to hire a tax pro in CA, in GA, or do we need both?

Pratap Koppula · Answer

Multi-State is a common phenomenon and you can hire one RE CPA for ease of communication and follow-up. See if you can spend more than 800 hours to leverage your Real Estate Agent license to produce income and to offset expenses against income.

Lee Ripma · Answer

@Rod Krause

It doesn’t matter where the CPA is, they can all handle different state returns. It does matter that they are an RE specialist.

Account Closed · Answer

From the simple amount you've stated, two people, high tech,  CA, I'd bet that you don't have a filing problem, you have a tax reduction problem. Depending on what you want out of real estate and how much of your money you want to keep, some kinds of investing are far better than others. And most CPAs aren't going to advise you on that. It takes someone who has done what you want to accomplish.

Basit Siddiqi · Answer

@Rod KrauseAs a CA resident you are required to file a CA tax return. Since you own an investment property in GA - you will be required to file a GA non-resident tax return.CA does have some unique state tax laws. One thing that makes CA tax laws so unique is that they de-couple from a lot of the federal tax laws.Nowadays - there is tax research softwares that tell tax practioners what the differences are between states.You should focus your search on finding a CPA who specializes in real estate taxation.Good luck on your search.

Bobby Lee · Answer

I agree with those saying look in California.

You mention working in IT - if you're in the startup world, make sure they understand stock options, 83(b) elections, and the plethora of rules in that area as these issues may not be familiar to smaller firms that don't regularly deal with startups or employees of startups.

John Duston · Answer

Definitely California. The state tax laws are a lot more work than almost any other state. Then they can file a nonresident return for GA.

Kevin DeVargas · Answer

@Rod Krause,

If you decide to select a CPA that’s located in CA or GA you more than likely will be serviced remotely because of the pandemic. I would focus more if the accountant specialized in Real Estate and their reputation. The good news is that you’re in the right place so many accountants on here specialize in real estate. Good luck. I’m sure you’ll find an excellent accountant.

Thanks.

Kevin De Vargas, CPA

Christopher Smith · Answer

Can't imagine any state return being beyond the capability of a modestly competent tax preparer when it comes to reporting basic rental activities in any state.

Hire a tax pro.. but in which state?

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