CPA, do we need a CPA?

[MaryAnne Burrows]

Newbies here, and we have some questions in regards to taxes and if we need a CPA or if we are good to wait till next year?

Here is our current situation:

Early in 2020 we put money into a deal with a partner to purchase a home to flip. We put a small amount of money into this deal, the main purpose was for this partner to show us how things can go when flipping a house and some tips and tricks.

We put $12,000 into the deal and made $2,669.

Next, we decided to make our own purchase and get our first rental. July 4th we bought our first investment property using a hard money lender. House was rehabbed by Oct 10th but we decided to try and sell it instead, after not having any luck and running our numbers again we refinanced and kept the house as a rental. Tenants moved in Dec 28th, 2020 and the house was refinanced Dec 30th, 2020. The prorated rent was given back to the tenants dues to issues out of our control but caused a bit of an inconvenience to the tenant. So we did not receive any income from the property in the year of 2020, but had all the expenses from the rehab. This is where all our questions come in, and also questions we probably are not even thinking of being this is our first property.

Do we need a CPA this early into our investment journey or can we tackle our 2020 taxes without a problem?

Do we use a schedule E?

For the property with the partner: How do we record the money from the flip? Can we also claim all the expenses that went into the flip?

For our rental: Do we claim the money that went into the rehab?

What are some questions we may need to be asking but are not thinking of?

[Klarissa Ann Gana Espeleta]

Quote from @Eamonn McElroy:

If this CPA's anecdote means anything: Roughly 50% of prospects who contact my firm and DIYed previously need 1-3 years of amended returns upon review.

Your situation is never as simple as you think it is.  You don't know what you don't know, especially when it comes to tax law.

 Hello! I'm looking for accountant that can work with CA taxes, can you recommend someone or are you available to take on  new clients?