Edmonton Real Estate Accountant, Tax Return Preparation

Our Accountant are expert at helping real estate investors to structure their operations and investments in a tax efficient manner. Our professionals participate in budget, planning, investment and tax reporting activities, and help real estate investors to make wise decisions

Rental income is any payment you receive for the use or occupation of property such as house, apartments, rooms, space in an office building, real or movable property etc.

Rental income – income you earn from renting a property that you own.

Rental operation – services you provide within your rental property to your tenants such as heat, lighting, laundry, cleaning or security.

Rental property – generally, a building or certain leasehold interests owned by a taxpayer(s) or a partnership that is mainly used to generate gross revenue from rent.

A rental property, other than a building, usually becomes available for use on the earliest of:

• the date you first use it to earn income
• the second year after the year you acquired the rental property
• the time just before you dispose of the property

A rental property that is a building, or part of a building, usually becomes available for use on the earliest of:

• the date you first use it to earn income
• the second year after the year you acquired the rental property
• the time just before you dispose of the property

A rental property that is a building, or part of a building, usually becomes available for use on the earliest of:

• the date when a fully constructed building is purchased or construction of the building is completed
• the date that you rented out 90% or more of the building
• the second year after the year you acquired the building
• the time just before you dispose of the building

When determining the available for use date, a renovation, an alteration, or addition to a building should be considered as a separate building.

You may be able to claim CCA on a building that is under construction, renovation, or alteration before it is available for use. You can deduct CCA that you have available on such a building when you have net rental income from it. The CCA that you can deduct is restricted to the amount of net rental income you have after you deduct any soft costs for constructing, renovating, or altering the building. For an explanation of soft costs, see Construction soft costs.

Capital cost – the amount on which you first claim capital cost allowance (CCA). The capital cost of a property is usually the total of the following:

• the purchase price (not including the cost of land, which is not depreciable)
• the part of your legal, accounting, engineering, installation, and other fees that relate to buying or constructing the property (not including the part that applies to land)
• the cost of any additions or improvements you made to the property after you acquired it, if you did not claim these costs as a current expense (such as modifications to accommodate persons with disabilities)
• for a building, soft costs (such as interest, legal and accounting fees, and property taxes) related to the period you are constructing, renovating, or altering the building, if these expenses have not been deducted as current expenses

For more information on current expenses, see Current or capital expenses.

Legal and accounting fees for buying a rental property are allocated between the cost of the land and the capital cost of the building. If land is acquired for rental purposes or for constructing a rental property, the legal and accounting fees apply to the land.

Capital cost allowance (CCA) – you may have acquired depreciable property like a building, furniture, or equipment to use in your rental activity. You cannot deduct the initial cost of these properties in the calculation of the net income of the rental activities for the year. However, since these properties wear out or become obsolete over time, you can deduct the cost over a period of several years. This deduction is called CCA.

Capital property – generally any property, including depreciable property, you buy for investment purposes or to earn business income. Common types of capital property include principal residences, cottages, stocks, bonds, land, buildings, and equipment used in a business or rental operation.

Benefits and Costs of Hiring a Real Estate Accountant

If you are a homeowner, developer, realtor etc. in Canada, you may want to consider hiring a real estate accountant to help you prepare your taxes. However, before hiring a real estate accountant, it is important to understand the experience that they should have and how much their services will cost. Listed below are some benefits and costs of hiring a real estate accountant.

Requirements for hiring a real estate accountant

Real estate accountants specialize in various tax areas and can help you save money year-round. In addition to helping you prepare your taxes, they can also offer you strategic business advice. Look for a real estate accountant with specific experience and accreditations. Also, make sure they have positive references.

If you own investment properties, your income tax filing can be complicated. For example, you’ll need to deduct the interest on your mortgage or bank loan. You’ll also have to take into account your capital cost allowance. You need to be knowledgeable about the tax implications of investing in real estate. If you don’t, you’ll be penalized.

Experience required

As the regulatory burden and industry practices continue to evolve, the field of real estate accounting requires a specialist who has thorough knowledge of the sector. In addition to the skills required in tax preparation, a real estate accountant will also provide comprehensive information to clients to help them make more informed decisions and investments. A real estate accountant should work closely with their clients to achieve their goals and understand the requirements of their clients.

A real estate accountant will provide financial advice to clients, prepare reports for real estate developers, and process tenant and vendor payments. They will also utilize commercial management systems and sheet tie-out to balance the general ledger and perform daily accounting tasks.

Benefits of hiring a real estate accountant

Hiring a real estate accountant is a great way to get more out of your real estate business. Not only will they know how to run the books for your real estate business, but they can also advise you on future real estate transactions. They also know the latest tax updates and real estate codes. This means that they won’t accidentally run afoul of tax regulations or get you in trouble.

A real estate CPA can also offer advice on how to structure your real estate business to minimize your tax liability. They can also advise you on more advanced investment strategies such as real estate investment trusts. There are important differences between an accountant and a CPA, so be sure to choose the right one for your business.

Costs of hiring a real estate accountant

Real estate is a good investment, but it can also have tax implications. If you own investment property, you must be aware of the tax implications of every step in the process. Among other things, you need to keep track of your expenses. Some common deductible expenses include: local real estate board dues, license renewal, desk fees, car expenses, cell phone, and advertising and marketing costs. Moreover, you need to keep receipts for all expenditures.