CPA Needed for California and Texas rentals

[Chris Tryling]

I work in California. And I reside there most of the time. I have a condo in California and have one of the bedrooms listed an Airbnb. I have a primary residence/mortgage in Texas and rent the rooms in that house with long term leases AND Airbnb’s. I need to set up an LLC (or two) to for tax deductions, and security purposes. Finding a CPA who handles both states and does not charge a $5000 retainer (annually) has been hard to find. My typical accountant fees (disregarding rental properties thus far, and considering two-state residences and multiple state and federal tax returns) is only around $700. But I have had trouble with communication with this CPA. (EXTREMELY difficult to get on the phone or email—Only concerned with my business during tax season.) SURELY there are good CPA’s somewhere in between the big shots and the H&R Block’s. Please help. Referrals needed!

[Katie L.]

@Chris Tryling Are you trying to find a CPA to create your LLC? If they're drafting the operating agreement, that's something you'll want a lawyer for. In California, that's considered the "practice of law" and CPAs could face criminal charges for drafting such a document. Not sure how it works in other states. Not sure if CPAs can do the basic secretary of state documents for you to form the LLC but there is case law saying any document that deals with legal rights is the practice of law, so just be careful about that.

As for finding a good CPA, there are several good ones out there.  But, likely not for $700.  That's pretty cheap.  There's that saying that you get what you pay for...  You probably will expect more $1,000-2,500 from a CPA would be my guess, but you can ask around.  I have names for you in San Diego if you're willing to work remotely then shoot me a message.  Or you could reach out to @Logan Allec in L.A. or @Brian Schmelzlen in San Diego.  @Michael Plaks is based in Houston and also may be a good resource for you.  Texas I think has no state income tax but I believe does have a franchise tax so you may have less of a tax burden there than in California but you'll definitely want to ask your CPA about that.

*This post does not create an attorney-client or CPA-client relationship.  Readers are advised to seek professional advice.