Elk Grove, CA Accountant for Real Estate Developers
Our Elk Grove accountants for real estate property developers at Cook CPA Group can help you navigate payroll taxes and taxable income. Call today.
The myriad moving parts involved in maintaining a real estate development business can be difficult to keep track of. Real estate developers have to account for all of the details involved in building sturdy and sound structures, understand zoning in the areas that they develop in, and more, all while winning the approval of the public. On top of this, they have to make sure that their bookkeeping is kept accurately and in accordance with relevant tax laws.
The help of a CPA can come in handy while navigating the complicated world of real estate accounting. The licensed accountants that work with Cook CPA Group are experienced with the inner workings of the real estate industry. Get in touch with them for help with any and all of your real estate development accounting needs. Contact the licensed CPAs that work with Cook CPA Group for help with your taxes and bookkeeping, or even just to set up a time for a free consultation.
Accounting Services for Real Estate Developers
From taxes for employee payroll to understanding administrative codes to negotiating like-kind 1031 transfers, there’s a lot involved in managing a real estate development company. The experienced accountants at Cook CPA can assist real estate developers with any and all of their accounting or bookkeeping needs. The following services can be managed with the help of a Cook CPA accountant.
Like-Kind 1031 Transfers
A like-kind 1031 transfer, also known as a Starker exchange, occurs when a taxpayer defers their taxes on the increase in property value that they’ve exchanged with a different property. The properties must be of a “like-kind,” meaning that they must be of the same nature, character, or class; it usually applies solely to business or investment properties. It’s intended to allow proceeds on properties to be reinvested in a similar type of property.
Real estate developers must pay taxes on the wages that they pay to their employees (these can also be known as trust fund taxes or employment taxes). If payroll taxes are not handled properly, it’s possible for the business to have their accounts frozen or to have other restrictions placed on them, which can negatively impact their bottom line. The accountants that work with Cook CPA Group can assist with proper payment of payroll taxes.
Local real estate commissions and state agencies create financial management guidelines that real estate development companies must follow. These guidelines have an impact on the accounting practices of real estate development companies. An accountant that works with Cook CPA Group can provide expert guidance regarding these guidelines and administrative codes.
Choosing an Accounting Method
An accountant with Cook CPA Group can assist you with the selection of an accounting method that can be used to manage all of your finances. There are two main methods that real estate development companies can choose between: cash basis and accrual. Cash basis accounting entails recording transactions, both income received and expenses paid. Accrual accounting, on the other hand, is based around recording income and expenses when they are incurred.
The Tax Cuts and Jobs Act
In 2017, the Tax Cuts and Jobs Act was passed, which continues to have an impact on the real estate development industry. The main change of the Tax Cuts and Jobs Act that affects the real estate development business is the lowering of the corporate tax rate; it was lowered from 35% to 21%. Other changes brought about by the Tax Cuts and Jobs Act are outlined below.
Taxable Income Deduction
As a result of the Tax Cuts and Jobs Act, taxpayers are provided with a 20% deduction on their taxes. Only single taxpayers that have an income below $157,000 or joint filers that have an income above $315,000 qualify. There are ways that tax filers can lower their income in an attempt to claim this deduction—they could transfer income to a C corporation or utilize the benefit of charitable contributions, for instance.
Bonus Depreciation Changes
Changes to bonus depreciation under the Tax Cuts and Jobs Act allow developers to write off properties that depreciate in less than 20 years. Properties qualify if they are not being used for personal use and if they have not received it as a corporate subsidy.
Elk Grove Accountants Available for Help with Real Estate Developers
Allow an Elk Grove accountant that works with Cook CPA Group to help make your accounting practices as seamless and simple as possible. No matter how complicated and involved your taxes and bookkeeping may be, an accountant at Cook CPA Group can help you make sense of it all in an efficient, professional, and timely manner so that your business can maintain optimal financial health.
Real estate developers in Elk Grove, CA, who are interested in using the accounting services of Cook CPA Group are encouraged to get in touch as soon as possible for a free consultation.