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Real Estate Accountant for Michigan Realtors
Whether it’s buying property, selling property, or working with residents to buy or sell homes, real estate professionals have a wide array of specific accounting and tax preparation requirements. A real estate accountant and tax professionals can help through financial reporting statements, document organization, real estate tax preparation, and real estate bookkeeping services, and much more.
By leaving the numbers to experienced real estate tax CPAs, real estate professionals can focus on what’s most important to them.
Real Estate Accountant for Residential Rentals
Our Canton Township, Michigan, accounting firm can assist real estate professionals with numerous accounting services.
Our residential real estate tax clients purchase rentals for many different reasons. Whether you are just beginning, running a property fund, or anywhere in between, the Schultz & Associates CPA firm has the experience to assist with your real estate tax and accounting needs.
If you are looking for entity selection and formation we can assist. If your accounting system is not yet in place, we can help. A real estate accountant can also show rental property owners and other real estate professionals how to fully take advantage of the many features of the QuickBooks accounting tool.
Single-Rental Property Owner
Some people wish to own one property.
Sometimes people become landlords because they have inherited a property, but do not wish to sell it right away.
Others also become landlords as a result of marriage, where they both own property but they can only reside in one.
And there are a multitude of other scenarios that require professional real estate accounting assistance. No matter which group you fall into, we can help.
Multi-Rental Property Owner
Multi-rental properties can mean different things to different property managers. It could mean 2 separate single-family homes. It could mean a duplex with 2 tenants. It could mean an apartment building with 10 to 300 units.
Sometimes, people purchase multiple properties but then realize that owning multiple properties is not for them.
Whichever your situation, Schultz CPA can assist with the real estate tax and accounting aspects of your business. Often when clients consider multiple properties, we consider different structure options.
Commercial Real Estate Tax
Our commercial real estate tax clients hold property for investment, as well as owner-occupied business property.
The tax rules can be different for commercial property and residential real estate. Most of the tax differences pertain to depreciation methods. Formation decisions are usually consistent with residential real estate models. Some investors choose to hold each property in a separate LLC, while others choose to purchase multiple properties into one LLC.
When business owners purchase property for their business, typically it is recommended that the property be purchased through a separate entity. When there is an owner-occupied arrangement, the business will pay rent to LLC holding the real estate. The real estate entity will also file its own separate tax forms.
Property Fund Managers
Property fund managers tend to not need our assistance with accounting.
We are more than happy to provide real estate tax services for all your properties or just a few. We can calculate the deprecation for you and provide the necessary journal entries when needed.
We understand that your properties often have multiple investors who need their K-1’s provided to them in a timely manner. We do our best to structure our tax season so that clients who need to distribute K-1’s have priority.
House Flipping
Some clients purchase real estate for rental purposes, but then decide that they would prefer to “fix it up” and sell it. If that’s your plan, we can assist with proper accounting and real estate tax decisions.
Some clients choose from the very start to not rent property and make a living flipping houses. We can assist with that as well.
The circumstance and frequency of the flipping will determine how the net proceeds will be taxed. We have seen houses flipped that have resulted in long term capital gains. But we have also seen them tax as ordinary income. And if the house flipper can do it quickly enough, the result can be a short-term capital gain, especially if the property is turned over in less than 12 months.
Real Estate Tax Structure
Once a real estate owner begins purchasing multiple properties, we then review structure. And depending on what the client is trying to accomplish, our advice may change.
Some real estate investors opt to keep all their property in an LLC and choose to have it taxed as either a partnership or a single member LLC (filed on Schedule E).
Other investors feel that it makes sense to put each property into a separate LLC. This can have benefits, but the recordkeeping and accounting increases considerably.
Sometimes, those with multiple properties in separate LLCs will choose to set up what is often referred to as a holding company. This holding company allows for the filing of only one real estate tax return. However, the accounting still needs to be kept separately.
All of these formations come with their own benefits and disadvantages, but there is usually one that fits a client better than the other options.
Get in Touch with Schultz
Contact our real estate accountants for more information about any of our accounting and tax preparation services in Michigan.
Jill Kehn, CPA is Ready to Help with Your Real Estate Accounting Needs
Jill Kehn, CPA is ready to assist you with your real estate tax and accounting needs. Please click here to see her bio and get in touch with her.
You can reach Jill either by phone (734) 354-2380 ext. 103 or by email at jkehn@schultz-cpa.com.