Real Estate Accounting

Our Lehigh Valley CPA firm works with a number of clients in the commercial and residential real estate development and rental business. If you own and operate rental properties, this is an activity where we can get your business setup on QuickBooks correctly from the beginning - before you have a lot of transactions entered that are difficult to later go back and fix.

Among the accounting and tax issues you must understand with regard to real estate investing include:

1) How to properly record the correct investment basis of the property from the information provided on the settlement sheet, knowing what is an expense versus capitalized cost, how to allocate a portion of the investment to the land (not depreciable) and finally, what the depreciation lives are for commercial and residential property.

2) How to setup and account for properties mortgages, classify the monthly payments in accordance with amortization schedules.

3) How to treat the various types of improvements to the property. Knowing the difference between what is a capitalized improvement versue what is rountine maintenance and repairs - and why it matters.

4) The considerations for buying and holding real estate in an LLC

5) How to use QuickBooks to separately track properties and tenants within the properties.

6) Other QuickBooks software add-ons which can be used for property management.

7) How to account for sales of properties and taxable gains and losses.

If you need help organizing your real estate transactions, contact us here.