What tax professional do I need to work with?

Member since 2025 · 1 post · 1 vote

Hello everyone, I am new to this forum and hoping to get some help to point me in the right direction. I have one rental property which is designed for long term rentals. My current tenant signed a 3 year contract. My question is what type of tax professional do I hire in order to help me qualify my rental property as a business? Am I looking for a tax strategist, CPA, or who specifically? I plan on acquiring more properties and growing from here, but I just want to get set up with someone who can help me grow this as a business entity rather than as an investment.

Thanks for your help!

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Natalie KolodijBusiness Member

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Tax Strategist| National Tax Educator| Accepting New Clients · Member since 2014 · 3k+ posts · 4k+ votes

A lot of people think of real estate this way.

That they need someone to help them "make it a business" and want an entity to "operate a business". The truth is you either are or aren't a business either way.

A business for tax intentions is defined in code section 162-and is basically the continuous and ongoing involvement for profit.

Almost all rentals are technically a business, and your rentals are allowed to deduct the same qualifying business expenses with or without an LLC or an entity.

That being said I do understand what you're saying which is that you're looking for someone to help you treat this like a business-get all your ducks in a row, grow it, etc.

The license IMO isn't the biggest factor at all. I have clients who are CPAs and pay me to do their taxes.

The most important factors:

-They are real estate specialized
-They have an actual history/ foundation in tax. Looked into someone's history/look on linked in. Many people just "start doing tax" or buy a tax firm and then copy+repeat the same information they hear actual experts talk about without actually knowing any of it themselves. Social media has unfortunately made it way too easy to present as an expert even when someone isn't.
-They focus on tax planning/strategy and not just tax filing.

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Natalie KolodijBusiness Member
Moderator
Tax Strategist| National Tax Educator| Accepting New Clients · Member since 2014 · 3k+ posts · 4k+ votes
1y
A lot of people think of real estate this way.

That they need someone to help them "make it a business" and want an entity to "operate a business". The truth is you either are or aren't a business either way.

A business for tax intentions is defined in code section 162-and is basically the continuous and ongoing involvement for profit.

Almost all rentals are technically a business, and your rentals are allowed to deduct the same qualifying business expenses with or without an LLC or an entity.

That being said I do understand what you're saying which is that you're looking for someone to help you treat this like a business-get all your ducks in a row, grow it, etc.

The license IMO isn't the biggest factor at all. I have clients who are CPAs and pay me to do their taxes.

The most important factors:

-They are real estate specialized
-They have an actual history/ foundation in tax. Looked into someone's history/look on linked in. Many people just "start doing tax" or buy a tax firm and then copy+repeat the same information they hear actual experts talk about without actually knowing any of it themselves. Social media has unfortunately made it way too easy to present as an expert even when someone isn't.
-They focus on tax planning/strategy and not just tax filing.

Podcast Guest on Show Pay Less Tax to the IRS This Year With THESE Real Estate Tax Strategies
Kolodij Tax & Consulting
Website View Page
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Aristotle Kumpis
Specialist · Long Beach, CA · Member since 2011 · 873 posts · 393 votes
1y
Hi Brian. You should consider forming an LLC if you haven't already. This will allow pass through taxation, so you can use the expenses against your personal tax returns. But I'm not an accountant, so you will need to talk with a professional.
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Natalie KolodijBusiness Member
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Tax Strategist| National Tax Educator| Accepting New Clients · Member since 2014 · 3k+ posts · 4k+ votes
1y
Quote from @Aristotle Kumpis:

Hi Brian. You should consider forming an LLC if you haven't already. This will allow pass through taxation, so you can use the expenses against your personal tax returns. But I'm not an accountant, so you will need to talk with a professional.

Hey there,

Tax pro here. An LLC changes nothing for tax wise and you can write off the same valid expenses with or without an LLC. Whether or not you can deduct losses created by rentals against your personal income depends on your overall income level, the type of rental, if you're a real estate professional, etc. An LLC doesn't impact that.
Podcast Guest on Show Pay Less Tax to the IRS This Year With THESE Real Estate Tax Strategies
Kolodij Tax & Consulting
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Aristotle Kumpis
Specialist · Long Beach, CA · Member since 2011 · 873 posts · 393 votes
1y
Quote from @Natalie Kolodij:

Quote from @Aristotle Kumpis:

Hi Brian. You should consider forming an LLC if you haven't already. This will allow pass through taxation, so you can use the expenses against your personal tax returns. But I'm not an accountant, so you will need to talk with a professional.

Hey there,

Tax pro here. An LLC changes nothing for tax wise and you can write off the same valid expenses with or without an LLC. Whether or not you can deduct losses created by rentals against your personal income depends on your overall income level, the type of rental, if you're a real estate professional, etc. An LLC doesn't impact that.
Hey Natalie. Thanks for clearing that up. I seem to get mixed answers from tax professionals. I have LLCs because I was told this.
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Natalie KolodijBusiness Member
Moderator
Tax Strategist| National Tax Educator| Accepting New Clients · Member since 2014 · 3k+ posts · 4k+ votes
1y
Quote from @Aristotle Kumpis:

Quote from @Natalie Kolodij:

Quote from @Aristotle Kumpis:

Hi Brian. You should consider forming an LLC if you haven't already. This will allow pass through taxation, so you can use the expenses against your personal tax returns. But I'm not an accountant, so you will need to talk with a professional.

Hey there,

Tax pro here. An LLC changes nothing for tax wise and you can write off the same valid expenses with or without an LLC. Whether or not you can deduct losses created by rentals against your personal income depends on your overall income level, the type of rental, if you're a real estate professional, etc. An LLC doesn't impact that.
Hey Natalie. Thanks for clearing that up. I seem to get mixed answers from tax professionals. I have LLCs because I was told this.

The only tax benefit to a SMLLC is you can deduct the annual fee you pay to have an LLC.
An entity doesn't change the nature of an activity or the nature of the income generated.

Podcast Guest on Show Pay Less Tax to the IRS This Year With THESE Real Estate Tax Strategies
Kolodij Tax & Consulting
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Mia TaylorPro Member
Member since 2024 · 11 posts · 2 votes
1y
Hey there Brian, and welcome to the world of real estate tax strategy! You're asking the right questions upfront, which is a great sign that you're serious about turning your rental property into a true business rather than just an investment.
You mentioned having a long-term rental...the long-term rental strategy would apply to your rental activity. Questions to ask during a consultation with a tax strategist could be "What other rental strategies could I use to help offset my W-2 income?" or "I'm not looking to offset W-2 income however, I'm looking for long-term growth strategies...are their other strategies I could do that could help me build a portfolio to strengthen my retirement income?"
I do not recall the question of what type of legal structure you should consider. However, considering your risk tolerance would dictate the type of legal structure you should consider. Therefore, a direct answer to this type of question...if asked would be it depends because you have to consider state law.
I hope this helps.
Mia
[email protected]317-800-7111
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Mia TaylorPro Member
Member since 2024 · 11 posts · 2 votes
1y
Again...a blanket LLC doesn't really answer the question regarding what a pass-through entity is and how to report it...a Single Member LLC is not recognized by the IRS where income pass-through to your individual income tax return. The LLC is simply used for asset protection at the end of the day. Yes, you should consider an LLC for real estate due to favorable state law asset protection status.
[email protected]317-800-7111
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Basit SiddiqiBusiness Member
Accountant · New York, NY · Member since 2015 · 8k+ posts · 3k+ votes
1y
The term 'Tax Strategist' is a catchy name but doesn't hold much weight.

You want to work with a CPA or EA who has experience working with real estate investors and will allow you to frequently discuss planning throughout the year.

Best of luck
[email protected]917-280-8544
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Aaron ZimmermanBusiness Member
Accountant · Chicago, IL · Member since 2018 · 2k+ posts · 1k+ votes
1y
I would say what you're looking for right now is a CPA that can prepare your return. However, you will also want them to be a tax strategist if and when you scale to more doors. You will also want to ensure you can ask questions throughout the year, which I don't necessarily view as tax planning.
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Mia TaylorPro Member
Member since 2024 · 11 posts · 2 votes
1y
Quote from @Basit Siddiqi:

The term 'Tax Strategist' is a catchy name but doesn't hold much weight.

You want to work with a CPA or EA who has experience working with real estate investors and will allow you to frequently discuss planning throughout the year.

Best of luck

[email protected]317-800-7111
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Mia TaylorPro Member
Member since 2024 · 11 posts · 2 votes
1y
[email protected]317-800-7111
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Fulton Abraham Sanchez
CPA| New Clients Welcome| 50 States · Member since 2016 · 430 posts · 93 votes
1y
Quote from @Brian Newyear:

Hello everyone, I am new to this forum and hoping to get some help to point me in the right direction. I have one rental property which is designed for long term rentals. My current tenant signed a 3 year contract. My question is what type of tax professional do I hire in order to help me qualify my rental property as a business? Am I looking for a tax strategist, CPA, or who specifically? I plan on acquiring more properties and growing from here, but I just want to get set up with someone who can help me grow this as a business entity rather than as an investment.

Thanks for your help!
You’re on the right track by looking for a CPA with experience in real estate taxation. A tax strategist or real estate-focused CPA can help you structure your rental activity in a way that aligns with your business goals, whether that’s qualifying as a business for tax purposes, optimizing deductions, or planning for future acquisitions.

Since you're planning to expand, working with a CPA who understands real estate professional status (REPS), entity structuring (LLC, S-Corp, etc.), and tax-efficient strategies for scaling would be beneficial. Look for someone who specializes in real estate investors rather than a generalist CPA, as they will be more familiar with depreciation, passive activity rules, and maximizing your tax benefits. Hope this helps!
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