Must have a CPA?

[Tomoko Hale]

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!

[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.