A successful real estate business whether it is investing in real estate to rent or to fix and flip or for a construction business, needs accurate detailed accounting reports to make good decisions - period!
Construction Accounting is a specialized field as it involves many accounting concepts that are unique to the real estate and construction business.
Accountant for Real Estate Investors
Real Estate investors need information that relates to their investment. Rental real estate investments need accurate cash-flow reports to plan for any cash shortfalls. Investors in the business of fixing and flipping property need to know how much money is being spent on the renovation to track profitability. Construction company owners whether large or one man shops need to plan for any cash shortages between paying their subcontractors and receiving payment from clients.
Accurate Cash-flow reports are crucial to a real estate business!
Apart from the cash-flow reports other reports that are important include the financial statements - the profit and loss statement and the balance sheet. The profit and loss statement gives a snap shot of the income and expenses incurred up to the date of the report, and the balance sheet gives a snapshot of the value of the assets and associated liabilities. In order to prepare the tax returns for a real estate business the CPA for real estate investors will ask for the profit and loss statement and the balance sheet.
Taxes for Real Estate Investors
Tax returns for real estate investors and construction business owners can be complex especially with work in progress for construction or 1031 exchanges for investors. A tax advisor not well versed with real estate transactions may not be the right person to help with tax return filing for a real estate business. There are many tax credit and other tax benefits that are available to real estate business owners but may not be known to all tax advisors.
So it goes without saying that it is advisable to use the services of a tax advisor who has in depth experience with real estate businesses.
If you have any questions or need additional information please contact us at:
Smita Patel CPA works with real estate investors, developers and construction business owners providing tax and accounting services. She has worked in this niche for over 20 years and has helped clients take advantage of tax credits and other tax benefits to reduce liability and stay in compliance with federal, state and local authorities. Please feel free to contact her at smita@numbersfigured.com.
