How to find a good real estate CPA?

[Dan Bryant]

Does anyone have advice on how to find a good real estate CPA? I’m in the heart of NC if you know someone personally in the area. I formed a LLC with my partner last year and we have a few units now so when it comes to filling my taxes I don’t think H&R Block is going to cut it this year. Thanks! Dan

[Logan Allec]

@Elizabeth Wilson Good question.

As a CPA with clients in various states and who is eager to pick up more clients from across the country to get as much business as possible, I am eager to say, "No! It doesn't matter!  Most states are based on federal tax law!  Seen one, you've seen them all!"

Because sure, all CPAs worth their salt will know how to get around in all states.

But there are some pros to working with a local CPA.

Reason 1: state tax laws are different

A local CPA is generally very well-acquainted with the laws in their state.  And laws can vary a lot from state to state and even in the same state from year to year.

Staying on top of the tax law changes for all different entity types (individuals, corporations, partnerships, etc.) is difficult enough for one state, and it's just not possible to do so for dozens of states.

Sure, if I am working with a client in Tennessee on a particular issue, I can do my research and come to the right conclusion, but that knowledge won't necessarily be top of mind for me like it would if the client were in California, and there may be planning opportunities that I miss because my TN tax framework I have in my head isn't second nature like my CA tax framework is.

Of course, the issues where in-depth state tax knowledge comes in handy typically don't come up when working with your typically BP newbie.

Reason 2: network

Also, a local CPA typically has a network of professionals that they know and trust that you can tap into.

For example, as a California CPA, I have a network of lawyers, agents, etc., that I can refer my California clients to.

I can't say the same for most other states, although I do have (limited) networks in those states when the needs arise.

Conclusion: look in-state for a local tax professional (CPA, EA, etc.) who is knowledgeable about real estate investing, preferably an investor him- or herself.  If you can't find such a person, then look out-of-state.

This is just my two cents.