CPA for first time short term rental investor

Member since 2021 · 9 posts · 15 votes

We are about to start building our first short term rental property. I am looking for a CPA to give guidance on the most effective way to go about the process and work with going forward. Our plan is to start with this property then potentially build another. Any guidance or suggestions would be greatly appreciated.

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Alecia LovelessPro Member

Member since 2019 · 3k+ posts · 2k+ votes

@Ross Derouen Inquire as to how the billing process will work.

There may be different fees for consulting vs fees for preparing taxes.

I worked with the franchise owner of a H&R Block for about 25 years while he owned the franchise and this company bills tax returns by the addition. So two W-2s, two charges. 4 interest income additions, 4 charges. Etc. so by the time my taxes were completed I had about 18 charges which gets expensive fast. The consultation during this time was free though.

Now the same guy sold the franchise and has his own company and it’s more of an hourly rate which is working out better for both of us. Consultation is still free but is now more difficult to obtain because he doesn’t work full time.

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Alecia LovelessPro Member
Member since 2019 · 3k+ posts · 2k+ votes
1y
@Ross Derouen Inquire as to how the billing process will work.
There may be different fees for consulting vs fees for preparing taxes.
I worked with the franchise owner of a H&R Block for about 25 years while he owned the franchise and this company bills tax returns by the addition. So two W-2s, two charges. 4 interest income additions, 4 charges. Etc. so by the time my taxes were completed I had about 18 charges which gets expensive fast. The consultation during this time was free though.
Now the same guy sold the franchise and has his own company and it’s more of an hourly rate which is working out better for both of us. Consultation is still free but is now more difficult to obtain because he doesn’t work full time.
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Bill HamptonBusiness Member
Accredited Investment Fiduciary, AIF®, Financial Planner, Tax Strategist, Real Estate Investor · Atlanta, GA · Member since 2012 · 2k+ posts · 977 votes
1y
@Ross Derouen
Bigger Pockets is a great place to find an accountant specializing in real estate taxation.

A good real estate accountant can save you thousands of dollars by leveraging entity selection and formation, tax deductions, cost segregations, bonus depreciation and tax planning.

I recommend finding an accountant specializing in real estate taxation, business taxation, financial planning and tax planning.

Consider working with your accountant remotely to expand your options.

I would also recommend looking for an accountant willing to work with you throughout the year. You want an accountant who can help you strategize and who is responsive when you want to know the consequences of the financial decisions you are making throughout the year.

Good luck.
404-482-3170
Hampton Tax and Financial Services LLC4.7106 Reviews
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Ross Derouen
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Member since 2021 · 9 posts · 15 votes
1y
Quote from @Bill Hampton:

@Ross Derouen
Bigger Pockets is a great place to find an accountant specializing in real estate taxation.

A good real estate accountant can save you thousands of dollars by leveraging entity selection and formation, tax deductions, cost segregations, bonus depreciation and tax planning.

I recommend finding an accountant specializing in real estate taxation, business taxation, financial planning and tax planning.

Consider working with your accountant remotely to expand your options.

I would also recommend looking for an accountant willing to work with you throughout the year. You want an accountant who can help you strategize and who is responsive when you want to know the consequences of the financial decisions you are making throughout the year.

Good luck.
This is exactly what I am looking for. Any suggestions on how to find that person to begin working with? It doesn’t have to be a CPA, an accountant that knows the business would be ideal.
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Aaron ZimmermanBusiness Member
Accountant · Chicago, IL · Member since 2018 · 2k+ posts · 1k+ votes
1y
You will want to work with a CPA that will walk you through material participation and other requirements. Great record keeping is imperative if you're trying to utilize the STR Loophole.
[email protected]
Brick House CPAs53 Reviews
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Sean O'KeefePro Member
CPA | Accepting new clients | 50 States · Member since 2022 · 1k+ posts · 870 votes
1y
Quote from @Ross Derouen:

We are about to start building our first short term rental property. I am looking for a CPA to give guidance on the most effective way to go about the process and work with going forward. Our plan is to start with this property then potentially build another. Any guidance or suggestions would be greatly appreciated.
I'm a Real Estate CPA. I work exclusively with real estate (inc. developers) and are looking for help accurately filing taxes and finding ways to optimize their tax positions. Feel free to reach out if you are still looking for help.
[email protected]628-241-0888
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Basit SiddiqiBusiness Member
Accountant · New York, NY · Member since 2015 · 8k+ posts · 3k+ votes
1y
If you have a STR where you actively manage the property, it may be possible to potentially treat the property as active as opposed to passive(Many people often call this the STR Loophole).

If that is the case, a cost segregation on the property plus alot of the furnishings can be depreciated using bonus depreciation to wipe out other income such as wages, interest, dividends, etc.
[email protected]917-280-8544
Basit Siddiqi CPA4.979 Reviews
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Sean GrahamBusiness Member
Investor , CPA · Detroit, MI · Member since 2016 · 582 posts · 248 votes
1y
Quote from @Ross Derouen:

We are about to start building our first short term rental property. I am looking for a CPA to give guidance on the most effective way to go about the process and work with going forward. Our plan is to start with this property then potentially build another. Any guidance or suggestions would be greatly appreciated.
Congratulations! That’s a big deal
Maven Cost Segregation Tax Advisors555 Reviews
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