Real Estate Tax Advisory and CFO for Investors – What Your Accountant Might Be Missing

Maximizing profits and minimizing tax liabilities top the priority list for most real estate investors. But navigating complex tax code and financial management can be a roadblock to growing your real estate business, especially if your CPA hands out more bills than guidance. But what if you had the expertise of an in-house CFO and real estate tax advisor on-demand? In this article, we'll explore how tax advisory and CFO services can benefit your real estate business beyond simply having a CPA, as well as the strategies that can be used to achieve those benefits.

Tax Planning and Strategy for Real Estate Investors

While most real estate investors know that tax planning is essential, knowing where to start is a challenge. Proper tax planning involves looking at the entire financial picture and devising a plan to minimize tax liability, including how your assets are structured. That’s where a real estate tax advisor can help by analyzing investment properties, identifying potential tax savings, and developing a strategy to help achieve your financial goals.

For instance, one of the most effective tax strategies for real estate investors is a 1031 exchange. It's a tax-deferred exchange that allows you to sell a property and reinvest the proceeds in a similar property without paying capital gaines taxes. Another strategy is cost segregation, which involves separating property assets into shorter depreciation schedules, resulting in higher tax deductions. With current tax laws, cost segregation could even result in up to 100% depreciation within the first year.

While these strategies may be common knowledge to real estate investors, they may be news to local or general CPAs, meaning that you could be missing out on opportunities to save thousands of dollars in taxes.

How Tax Advisory and CFO Services Improve Real Estate Businesses

• Tax Advisory Services: A real estate tax advisor can navigate the complex tax code and identify tax-saving opportunities that general CPAs might have missed. For example, a real estate tax advisor can help you understand the tax implications of different investment structures and strategies, such as structuring assets under individual LLCs or using a self-directed IRA (SDIRA) to invest in real estate.
• CFO Services: A real estate CFO helps manage your finances more effectively by providing financial insights and analysis. They optimize cash flow, create budgets and forecasts, and develop investment strategies that align with your financial goals, ultimately helping you make smarter investment decisions, minimize risk, and maximize returns.

Finding the Right Tax Advisor and CFO for Your Real Estate Business

When choosing a real estate tax advisor and CFO, it's important to find someone who has experience in the real estate industry. Look for a deep understanding of the unique tax implications and financial challenges that come with investing in real estate and a history of helping other real estate investors grow their businesses. You want someone who tells you about the latest tax laws and how to take advantage, not the other way around.

“But what if I already have an accountant?” Advisors typically prefer to handle all of accounting and bookkeeping to give you the most informed guidance. However, some real estate tax advisors and CFO service providers can work with your existing CPA to compliment your existing accounting and bookkeeping team.

Bottom Line

Tax advisory and CFO services provide guidance and an essential gut check for real estate investors who want to maximize their profits and minimize their tax liabilities. Strategies like 1031 exchanges and cost segregation can unlock accelerated depreciation and a host of other tax benefits, saving real estate investors thousands. Working with a real estate tax advisor and CFO can also help you choose the right strategies, more effectively manage your finances, make better investment decisions, and stay compliant with accounting regulations. When looking, choose a tax advisor and CFO with experience in the real estate industry, like RealCount, to ensure that you get the guidance and expertise you need to succeed.

RealCount is a team of experienced professionals who specialize in real estate accounting, tax advisory, and CFO services. Our team can help you develop a tax strategy that maximizes your profits and minimizes your tax liabilities.

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