Why Getting a Tax Accountant Before Investing in Real Estate is Important
FAS CPA & Consultants
Some investors often make the mistake to go into real estate without hiring a good professional tax accountant first. The wise ones, though, know that this is an essential step towards their success and it is not one to be missed. So why getting a tax accountant before investing in real estate is important? Keep reading to find the answers.
Sound Advice on Business Structure
Not all business structures are equal when it comes to real estate investment. Some are much more beneficial than others and their perks vary depending on your unique situation. A CPA will look into this and your investment goals and advise you on the best option in your case. It’s important to start off with the right business structure, because if you wish to convert at a later stage you may encounter a double taxation problem.
Well Crafted Tax Planning Strategy
Your tax accountant will help you create the most favorable tax planning strategy for your real estate investment. It may include holding the property for a certain period of time to qualify for capital gains tax rate, using the 1031k exchange, applying the right deductions and many other routes to save you money from taxes and maximize your profits.
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Always Up to Date with the Tax Laws
Small changes to the tax code and laws are not uncommon and happen fairly frequently. It is a CPA’s job to be aware and in line with all updates. This benefits you in two ways:
⇒ Gives you time to adjust your tax planning strategy if need be.
⇒ Keeps you out of trouble with the IRS.
Professional Accounts Management
The most obvious reason to get a tax accountant is to have your bookkeeping managed professionally and accurately all year round. Normally, CPAs will take over the reporting of all financial transactions, which in real estate investment can be many – rental income, leases, time-sharing, sales and so on. They will also prepare your annual tax returns and communicate with the IRS on your behalf if such need arises.
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How to Find a Good Tax Accountant for Real Estate Investment
It is important to have a good and close relationship with your tax accountant. When you begin your search you should look for someone who:
⇒ Has the relevant qualifications.
⇒ Has proven experience in real estate investment.
⇒ Has good reputation, confirmed by past or current clients.
⇒ Is trustworthy.
⇒ Is not willing to break the law, but can maneuver legally.
Readers should note that this article is only intended to convey general information on these issues and that FAS CPA & Consultants (FAS) in no way intended for the contents of this article to be construed as accounting, business, financial, investment, legal, tax, or other professional advice or services. This article cannot serve as a substitute for such professional services or advice. Any decision or action that may affect the reader’s business should not rely solely on the contents of this article, but should rather be consulted on with a qualified professional adviser. FAS shall not be responsible for any loss sustained by any person who relies on this presentation. This article is subject to change at any time and for any reason.
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