How Important is it that Tax CPA Specializes in RE?

Question

Hi there!

We're considering switching Tax CPAs this year; we'd like someone to provide proactive tax advice in addition to standard tax filing. We have both a flipping business (typical LLC) and a rental business (series LLC), and currently own five single-family rentals. Future target is to grow rental company to 30 rentals and we want a CPA that can provide situational recommendations as we increase in size.

Would appreciate 1) thoughts on whether it is 100% recommended to use only Tax CPAs that specialize in real estate (e.g. vs. a family friend who owns a general tax business) and 2) any recommendations on real estate CPAs that can provide tax services and proactive advice for the state of Texas.

Any info / advice would be very much appreciated!

Cheers,

N

Daniel Hyman · Answer

@Nicole Sparkman

We get this question all the time. My answer is usually something like this:

For someone who was gifted or inherited a small property (or even someone who actively purchased a rental but is not looking to grow the portfolio) the switching cost to a new CPA may not be worth it. Stick with the familiar family tax preparer. (That does not sound like your scenario.)

However, for someone who is looking to grow in this industry (as you clearly are) then it is absolutely imperative to work with a real estate specialist. The tax code is highly nuanced for real estate investors.

Ronald Rohde · Answer

I recommend Brandon Hall or Daniel Hyman, both are great!

Jason Hirko · Answer

@Nicole Sparkman A decent REI CPA is better than an excellent generalized CPA any day of the week if you are seriously investing

Yonah Weiss · Answer

@Nicole Sparkman

@Michael Plaks is in Houston. There are a number of other CPAs here on BP that work remotely in all states like @Daniel Hyman and @Brandon Hall

Congrats on your success, and continued growth!

Generally speaking, a CPA who does not specialize in real estate, is not necessarily a reason to rule them out; however, if you are looking for someone who is proactive, and focuses on tax planning, you should be clear on your intent, and make sure the CPA you hire can do that.

Michael Plaks · Answer

Thank you for your endorsements, @Yonah Weiss and @Basit Siddiqi.

@Nicole Sparkman - please reach out anytime.

Basit Siddiqi · Answer

@Nicole SparkmanCPA/Accountant is a service based profession and the tax code is lengthy and complex.There are tax code sections specifically written for real estate investors, developers, teachers, international residents, various entity types, etcIt is impossible to know the whole tax code; especially with all the changes that occur from year to year.The tax code complexities revolving around real estate include items such asdepreciation, cost seg analysis, 1031 exchange, opportunity zone, short-term rental not subject to SE tax. A practitioner who does not know real estate 100% may not be aware of all of the above.I would reach out to @Michael Plaks as he is located in Houston. Alternatively, there are many CPA's/Accountants who work remotely who may also be a good fit.

Michelle Lutz · Answer

I recently switched from a great general business CPA to one that specializes in RE and it was a game changer for me. I guess it depends on how good (or bad?) your existing CPA is. Might be worth just having RE CPA review your last few years returns and give you their thoughts.

Khanesia Washington · Answer

If you're selling proactive advice about your real estate business I would suggest a CPA specializing in REAL ESTATE

Ethan G. · Answer

I will send you a PM with my CPA info

How Important is it that Tax CPA Specializes in RE?

How Important is it that Tax CPA Specializes in RE?

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