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John Carr
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First Time House hack, Do I need more help then my HR Block tax person

John Carr
Pro Member
Posted Jul 20 2024, 12:28

Hey Team,

Quick run down. I live in my PR located in IL, but bought a home in FL with my daughter which she is house hacking. We are renting out 3 rooms atm. Since I make well more then my daughter, the plan was for me to claim the house for any tax breaks.

Question is, will we need a more specialized tax professional then the HR Block person I've been using for 20 years. They, the HR Block person, is also an investor and owns multiple properties, so I just assume they are well versed.

Thanks for your thoughts!

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Bill Hampton
Tax & Financial Services
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  • Tax Strategist, Financial Planner and Real Estate Investor
  • Atlanta, GA
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Bill Hampton
Tax & Financial Services
Pro Member
  • Tax Strategist, Financial Planner and Real Estate Investor
  • Atlanta, GA
Replied Jul 20 2024, 13:56

@John Carr

I recommend finding an accountant who specializes in real estate taxation and tax planning. You may want to consider working with your accountant remotely to expand your options.

I would also recommend looking for a 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.

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Joshua Thompson
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#4 Tax, SDIRAs & Cost Segregation Contributor
  • Accountant
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Joshua Thompson
Tax & Financial Services
#4 Tax, SDIRAs & Cost Segregation Contributor
  • Accountant
  • Princeton, TX
Replied Jul 20 2024, 14:05

It's great to work with a real estate-specific tax professional but it's difficult because you don't always know what you don't know. For example are they making a major mistake? If this is the same person you've worked with for years and have a good working relationship I would first give them the benefit of the doubt and reach out to two other accountants to see if they will do a complimentary review of you previous tax returns. If all appears to be in order then there might not be any harm staying with HR Block. The downside is that a specific individual might not be there next year and you'll have to build a new relationship with someone that might not be as knowledgeable.

Best of luck!

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Markus Shobe
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Markus Shobe
  • Accountant
  • Indianapolis, IN
Replied Jul 20 2024, 15:01

If the HR person has RE properties I would assume that they are good at real estate tax planning and etc and since you have been with them for 20 years you are familiar with them and they are familiar with you. I would want a RE tax pro that I can reach out to throughout the year and not just during tax time. 

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James Mc Ree
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  • Malvern, PA
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James Mc Ree
  • Rental Property Investor
  • Malvern, PA
Replied Jul 20 2024, 15:57

I agree with @Markus Shobe. You should have a conversation with your HR Block person as a resource to learn what you should be thinking about. Owning a rental home with or without house hacking is a pretty basic thing that almost any certified tax professional or accountant should be able to handle.

Think a little in a bigger picture about what type of advice you will want: tax, accounting, financial planning? The general accountant can help you with more than just tax reporting. The tax person is taxes only. You might get more value from a financial planner or accountant if you want a little more help, such as retirement planning. Just a thought...

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Zachary Jensen
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Zachary Jensen
Tax & Financial Services
#2 Tax, SDIRAs & Cost Segregation Contributor
  • Accountant
  • San Diego, CA
Replied Jul 21 2024, 07:12
Quote from @John Carr:

Hey Team,

Quick run down. I live in my PR located in IL, but bought a home in FL with my daughter which she is house hacking. We are renting out 3 rooms atm. Since I make well more then my daughter, the plan was for me to claim the house for any tax breaks.

Question is, will we need a more specialized tax professional then the HR Block person I've been using for 20 years. They, the HR Block person, is also an investor and owns multiple properties, so I just assume they are well versed.

Thanks for your thoughts!


 Hey John, 

Sounds like you need to talk with this person and question them on the benefits of real estate and what you can write off for your situation. I don't think you need someone who is highly real estate focused just yet as the situation you describe above is pretty strait forward. If this HR block person doesn't know (which is common with them sadly) it maybe time for another accountant 

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Basit Siddiqi
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Basit Siddiqi
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Replied Jul 25 2024, 07:09

Who owns the house?
Do you or your daugther own the house(or potentially as tenants in common)?

The one who owns the house will normally dictate who will report the activity on their return.

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Michael Plaks
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Michael Plaks
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#1 Tax, SDIRAs & Cost Segregation Contributor
  • Tax Accountant / Enrolled Agent
  • Houston, TX
Replied Jul 29 2024, 00:03

@John Carr

There're three parts in your question.

One is about your HRB person. If he knows what he is doing, it does not matter that he works for HRB. But I have no clue whether or not he has the required expertise. Since he is an investor himself, it's likely that he understands real estate taxation. Likely but no guarantee. If you want to be real sure, you can have him do the work and then pay another accountant  who is a real estate specialist to review it before filed.

The other part is your situation. We would need to know who is an actual owner. Which means who is responsible for the property, who gets the financial benefits and who makes the decisions. It's case by case. Maybe you, maybe your daughter, maybe both of you. Whoever is the owner claims the property on taxes. You don't get to choose who claims the property based on who makes more money.

Third, here comes the bad news: you cannot generate tax losses from renting rooms out of your own (or your daughter's) residence. If your HRB guy tells you otherwise, then you know that you need to upgrade.

Now, if you were the sole owner, and your daughter was renting it from you and paying you a market rate, we would have a different conversation. Again, check if your HRB guy understands the difference.

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Matthew Kwan
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Matthew Kwan
  • Lender
  • Seattle, WA
Replied Aug 1 2024, 10:24

I am not a CPA, I am an investor myself and mortgage broker that focuses on helping with investor on expanding their portfolio in real estate. Oftentimes, we would work closely with CPA to make sure how our borrower's taxes can be filed that would save them from paying taxes, but also making sure they can qualify in a lender's perspective.

You would want to make sure your first few deals has an acceptable of return in order to lower your DTI and expand your investment portfolio in Real Estate. However, you could still have - cashflow on paper, but still break even or potentially have + cashflow on your taxes. Lenders will use your tax returns schedule E to calculate your monthly rental income. The goal is to show that you are not making money in the lens of the IRS, but also making sure that you can + cashflow in the lending world.

@Albert Bui @Carlos Valencia

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Tanner Bellamy
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Tanner Bellamy
Tax & Financial Services
  • Accountant
  • Southern California
Replied Aug 7 2024, 07:21
Quote from @John Carr:

Hey Team,

Quick run down. I live in my PR located in IL, but bought a home in FL with my daughter which she is house hacking. We are renting out 3 rooms atm. Since I make well more then my daughter, the plan was for me to claim the house for any tax breaks.

Question is, will we need a more specialized tax professional then the HR Block person I've been using for 20 years. They, the HR Block person, is also an investor and owns multiple properties, so I just assume they are well versed.

Thanks for your thoughts!


 Hey John, just putting my two cents in here for what its worth. I would think you could assume that your HRB guy knows what he is talking about since he owns multiple properties. However, you can never be sure without asking. I would strike up a conversation with him and see what he thinks. If he is in fact well versed on the tax side of the real estate world, tell him he needs to find a better paying job! Maybe he should become a tax pro on the BiggerPockets website and start sharing his expertise if thats the case!

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Max Emory
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Max Emory
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Replied Aug 8 2024, 14:35

Hey @John Carr, yes. I'd recommend getting an REI-savvy tax pro so you guys make sure you're maximizing your tax strategy as well as when it comes time to file.

An REI-savvy tax pro is worth their weight in gold.

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Alecia Loveless
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Alecia Loveless
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Replied Aug 8 2024, 21:25

@John Carr I worked with a guy from HRB for 27 years and then on his own last year. He was originally the owner of the franchise and all the local Big Yahoos used him for their taxes. He knew a bunch about it and had a ton of certifications and awards.

Just because he’s with HRB doesn’t mean he’s not qualified. Do a little more research.

However I did find that HRB charges a fee for every W-2, 1099, and P&L as well as any other form you gave them when preparing my taxes so what was once a $300 tax prep had turned into about $1700 the last year he did them.

Am currently looking for a new preparer and am curious to discover the new cost associated with the preparation.