Two part question 1. Do you have a real estate specific tax professional 2. If so, what are you paying (approx) every year for the service
Adaline Bailey: I think its great to have a RE tax attorney specialist in the wings if you need him/her. But many common things come up in RE that you use a non specialist for and the fee might be 1/2 the price or even a 1/3 of the specialist. But, when something really complicated comes up, its often worth it to bite the bullet and pay the big bucks to a specialist.
Adaline Bailey: Regarding a RE CPA specialist. Same thing. If you are constantly doing complicated RE deals, you might have to find a specialist. That normally means a large corporation where it will cost you $100 every time you put in a 10 minute call to them. If your deals are less complicated and your sharp RE lawyer puts them together correctly, then you can use a good CPA that is fairly knowledgeable in RE. If you can find a one or 2 person office that seems pretty good, that might be a good fit. I have a one person CPA that can answer most of my questions, handle my frequent 1031 exchanges and doesnt bill me when I make a quick call for advice.
Vivian Drake: Thanks Mark great reply. As a comparison how many deals approx do you do a year and/or how many units do you hold (if those are your businesses). And what range do you spend yearly in professional tax advice/strategy/and prep services.
Adaline Bailey: I probably average 2-3 deals per year. They tend to be larger deals that involve 1031s. For my phone calls and year end tax prep I pay $2000-2500. There are additional legal fees for each deal that might average $2000. These would be fees for speci…See more
Vivian Drake: Adaline Bailey: thanks. Appreciate the input
Adaline Bailey: Max, a good accountant, at the end of the year, will send you an organizer. This is a series of pages that show each property that you own and the prior years income and expense. There are lines next to prior years for you to fill in the current ye…See more
Ariana Bowman: Adaline Bailey: firm used has no effect on your chance of being audited or how it is examined.
Adaline Bailey: Ariana Bowman: i wouldnt count on that idea. My father had 22 years with the IRS and my CPA had 14 years with the IRS. They say they target CPAs with shady reputations and very seldom go after the larger, prominent firms. The IRS investigators have to justify their time and they find that most battles with large firms is a lost cause.
Jayla Pena: Mark is right. If you are just doing regular (buy and hold, fix and flip) and you are using traditional funding then someone that understands RE would do. But I you are getting creative then pay the extra money for the specialist. They tend to have more strategies to hide your money.
Vivian Drake: Ace approx how much do you pay a year on tax planning/strategy/and prep. Ballpark
Jayla Pena: Vivian Drake: my REI portfolio is still growing. Before now I only had rentals. Thats nothing special. Now Im working flips, Sub To deals and IRA lending/borrowing so next year I will be calling in the big dogs KKOS Lawyers. They know the ins and outs of the REI game. Gotta plan ahead right 😉
Ariana Bowman: Typically youd be looking at $250 an hour and fees very there is an fee survey by the national association of accountants that details average annual fees.
Zayden Flowers: 2 answers. I dont know and second part Im not sure. Hope that helps
Vivian Drake: Yes very insightful. No further answers needed 🤣