Real Estate Tax Accounting Professional

real estate tax accounting professional
As Condominiums, Co-operatives, and Homeowners Associations became a greater part of the Greater New York City Area, we made it part of our business to acquire the knowledge and expertise to successfully guide these organization. We work with the boards and the management companies to insure that all compliance and reporting requirements are met.

Real Estate Tax Accounting Professional

We can provide the following services:

  • Audited financial statements.
  • Review and/or complied financial statement.
  • Preparation of the required tax returns.
  • For co-operatives, the annual tenant shareholder letter.
  • Management letter no internal controls.
  • A letter to the president or treasurer providing suggestions to strengthen internal controls, policies and procedures which do not affect the audit. We will provide recommendations to the board regarding long range planning and operating efficiency.

The Real Estate Tax Puzzle

At first glance, real estate taxes seem pretty straightforward. You buy a property, the local government assesses its value based on a standard formula, and you pay whatever the assessment is, less any legal deductions to which you’re entitled. And that’s where it starts to get tricky.

 Real Estate Concept

 

There are many deductions — state, local and federal — that may be available to you, based on the type of property you own, how you use that property and your age and income status. For example, some senior citizens are entitled to a real estate tax reduction, as are some military veterans. A home in certain areas of a city may be allowed a tax abatement, which reduces property taxes for a given number of years in return for your investment in an economically depressed area. For commercial property owners, there could be federal programs designed to give you a tax break if you operate a particular type of business or if your business is minority- or woman-owned.

 

If you are a residential landlord, you can mitigate the total amount of your tax outlay by claiming depreciation on the value of the property when you file your annual income tax return. There are some tax traps involved with this technique, however, as the federal government has placed limits on “passive losses” such as depreciation. A miscalculation on this point could result in a bill for thousands of dollars in back taxes down the road. There are exceptions, however, for what the government terms “active real estate investors,” but knowing whether you fall into this category can be confusing, resulting in a similar tax trap if an error is revealed.

 

Yet another hazard exists for people who are accidental landlords, as in “We had to move and couldn’t sell our house, so we’ve decided to rent it for a while.” If you continue to pay the same real estate tax that you paid when you lived in that home, you could be in for a big shock at some point. That’s because you are now using your house for commercial purposes, and that puts the property in a different — probably more expensive — tax category.

 

Veteran real estate investors know some tricks of the trade that reduce their tax burden. For instance, in some locales it’s relatively easy to get your taxes reduced by challenging your property assessment in court. An owner would claim that his property was overvalued by the tax assessor and thus he is paying more tax than warranted. The hazard here is that a review of the assessment could go awry and result in the property being valued even higher than it was initially. The key to success lies in thoroughly understanding the real estate market and the tax laws in your locality.

Real Estate Tax Accounting Professional Results

Rather than trying to put all of these pieces together on your own, consider hiring an expert — one of those people who does understand the law and the variations of your local market. The cost of a good real estate tax professional is an investment that enhances both your property and your peace of mind.

If opportunity arises we would enjoy talking with your board regarding accounting and consulting services we can provide.

Member of the American Institute of CPA's

Member of the New York State Society of CPA's