All Forum Posts by: Tomoko Hale
Tomoko Hale has started 8 posts and replied 57 times.
Post: Must have a CPA?
- Posts 57
- Votes 19
Thank you for the info. I check the thread that you provided me. So if have a knowledgable accounting person(or firm)to with with and something happened to fight IRA then I can hire a representative at that moment?
Post: Must have a CPA?
- Posts 57
- Votes 19
Quote from @Tanner Bellamy:
Hi Tomoko,
I wouldn't focus so much on the license that an individual has but instead their knowledge and expertise in your specific field of work, especially for real estate. So I think you hit it right on the nose with your question of someone having knowledge but no license. To me a license doesn't prove one is qualified for a job.
However, having a CPA or EA license allows the individual to represent you before the IRS in the event you get audited. Again, the license doesn't prove that that individual would be best at representation (in my opinion). It simply allows them to be able to represent.
Hope this helps!
Thank you for your reply!!!
Post: Must have a CPA?
- Posts 57
- Votes 19
Quote from @Joshua Thompson:
Hi Tomoko,
As long as they are an EA, CPA, or attorney that works in the tax field and they have good real estate knowledge I would feel comfortable interviewing them to see if it would be a good fit. Relationships and communication is huge and that's what we try to focus on. If your current accountant isn't a CPA but one of the other two above, you have a good working relationship and they have real estate tax knowledge I would recommend staying there to be honest.
Best of luck!
Thank you so much for your reply!
Post: Must have a CPA?
- Posts 57
- Votes 19
Thank you so much for your reply. We have added a long term rental property and are planning to add more for the future and needed advise. We have been working with an EA and want to evaluate if this is a timing to start looking. Your reply was great. Thank you!
Post: Must have a CPA?
- Posts 57
- Votes 19
Quote from @Katie Ripp:
This is a great question, and many people encounter this situation when they're just getting started!
It seems the accountant was highlighting that a CPA (Certified Public Accountant) can represent you before the IRS, while someone without a CPA license or Enrolled Agent (EA) status cannot. This representation is crucial if you're ever audited.
Regarding whether to hire a CPA versus just a tax preparer: Real estate tax is highly specialized, with numerous code sections and rules specific to the field. Most tax accountants don't exclusively focus on real estate tax, so they may lack the in-depth knowledge that a CPA specializing in this area would have. Given the complexity and potential tax-saving opportunities in real estate, it's wise to consider hiring a CPA with expertise in this field.
Many clients who work with non-specialists find that their non-real estate preparers lack the specific knowledge to help them minimize taxes through strategies like depreciation, the de minimis safe harbor, partial asset dispositions, 1031 exchanges, navigating real estate professional status, the short-term rental loophole, and more.
If you are looking to qualify as a real estate professional, use the short-term rental strategy, or complete a 1031 exchange, I would without a doubt recommend working with a real estate CPA.
Thank you so much for your reply! Appreciate you.
Post: Must have a CPA?
- Posts 57
- Votes 19
Many people mentioned that it is strongly recommended to have a CPA as a part of the team.
I started looking in my area and am a beginner of real estate investment.
Would you please tell me the reasons to have CPA vs a tax accountant. What if a tax accountant has a lot of knowledge and experiences of tax laws including investment, would it matter?
I had a call with an accounting firm this morning and he mentioned something like he is not a CPA so he is not able to represent like CPA.
What does it mean?
Thank you!
Thank you Molly. I'm in SLC, UT so a bit far away. Dang!
I've been researching on digging well, electricity cost so I will dig more info. It is zoned as a farm land as of now. I didn't even think about calling the county. Thank you for letting me know that.
I will look for a local meet up as well so at least I have a place to learn.
Thank you
Thank you for your reply. Our property is situated in the mountains, approximately 100-150 feet from the waterline, and I can see the lake(State Park) from the property. There are ski resorts close to our property, and the lake is a very popular destination for families and friends to visit during the summer and fall. There are caves, a golf course, hiking trails, and a state park nearby. It has the least flood risk.
I haven't had an appraisal done, but the property tax we pay keeps increasing based on the estimated property value. Perhaps this isn't the best way to measure the value of the property.
I will keep your advice in mind and continue to think about whether there's a way to utilize the land or if it's best to leave it as it is for now. Thank you.
We purchased 40 acres lot that is very closed to a lake in Idaho. We wanted to build a cabin for us but learned there is nothing and off grid so it has been sitting there for last three years and paying the property tax. We've been hearing eventually that area will be developed but don't know when. The place has been appreciated 70 K last three years. If you were us, what would you do? Build camp grounds or something, or just let it sit for the appreciation? Any advise please.
Quote from @Joehn B.:
Quote from @Tomoko Hale:
Thank you for the info! How come ADU can offset my cost?
Because you can rent it out, like renting out a room in your home. (in some cities), which is why you need to see if it has been properly permitted, and if occupancy / rent is allowed in that particular city.
Thank you so much for the info.