Accounting for Real Estate: Real Estate Accounting

Name: Accounting for Real Estate: Real Estate Accounting
Rating: 4.1 (443 reviews)

From Acquisition to Sale

Created byLuntadila Paulo, CPA, MBA

Last updated 2/2024

English

What you'll learn

Learn the foundation of accounting for real estate
Develop an understanding of the real estate acquistion process and how it is captured in the accounting system
Understand the tax implications of the real estate transactions
Comprehend how accountting helps real estate professional reduce their tax burden

Course content

8 sections • 28 lectures • 2h 36m total length

Welcome to the course1:50
General Instructions2:52
Download the three workbooks to follow along with pre acquisitions, rehab, and rental real estate accounting, then enter journal entries into the general ledger for clear financial reporting.

Accounting for pre-acquisition stage7:02
Tax Implications at the pre-acquisition stage: first time vs. existing business4:01
Explore pre-acquisition tax implications for first-time buyers and existing properties, distinguishing startup costs from operating expenses and noting limits of up to $5,000 and $10,000.
Accounting Best practices5:54
Implement real estate accounting best practices to improve record keeping, systems, and advisory support, ensuring accurate deductions, timely payments, and balanced financial statements.
Tax Tip: Start-Up and organizational deduction5:54

Accounting for acquisition stage21:44
There is a small mistake in the entry. The Building amount is incorrectly entered and the seller's credit was not included. Natalia, one of your classmates, pointed that out in an email. See the next video for clarification.
Update to Entries on Accounting For Acquisition Stage5:48
Tax Implications at the acquisition stage5:28
Use cost segregation to accelerate depreciation and reduce taxable income at acquisition, while understanding that depreciation lowers basis and can affect future gains; consult advisors about planning.
Accounting best practices4:13
Tax Tip: Cost segregation Study4:58
Use cost segregation to accelerate depreciation and cut taxes on rental real estate; identify life differences among building components to unlock extra tax savings.
BONUS: Additional Items to Consider in Acquisition4:00

Accounting for operations of rental properties5:39
Analyze rental property operations by modeling net operating income, positive cash flow, and depreciation while recording monthly journal entries and managing vacancy, replacement reserve, and operating expenses.
Tax implications of operating rental properties4:37
Learn how depreciation and adjustments shift rental property income into taxable income, and how repairs, maintenance, and K-1 allocations affect taxes for real estate investors.
Accounting best practices2:43
Apply real estate accounting best practices by establishing systematic recordkeeping and bookkeeping to capture expenses, revenue, and deductions, reducing taxable income. Explore depreciation as a key strategy for rental properties.
Tax Tip: Depreciation and NOL6:25

Welcome to Bonus Module1:19
Set up a real estate company in this bonus module and apply course concepts with practical journal entries and real-life transactions.
Forming an Entity6:35
Form an entity, file the article of organization for an llc or lp, and secure securities counsel to set up a limited partnership and subscription agreement with accredited investors.
Deal Sourcing to Close8:13
From entity formation to close, explore LLC/LP structures, investor roles, and sourcing a Chicago multifamily deal with due diligence; learn startup costs, capitalization vs expensing, and QuickBooks, NetSuite, Wave use.
Holding Period5:55
Exit8:10
Learn how real estate deals use LLCs or LPs, navigate pre-deal to exit stages, and apply tax planning, cost segregation, depreciation recapture, and investor distributions.

Requirements

None required. Ideally, students should know a little bit about accounting

Description

In this course, we explore the value of accounting as a key tool for improved performance for real estate businesses and investors. We will look at the best way to capture accounting information from the acquisition of the property from both the bookkeeping as well as tax perspective to its disposal (sale).

We will look into the accounting end and documentation as well as tax planning opportunities to help students develop a deeper understanding of both accounting and tax for real estate in an effort to assist real estate professionals/investors to make better-informed decisions about the portfolios.

Some of the most important topics we will cover include:

1. Pre-acquisition accounting

2. Acquisition accounting (emphasis on the cost-segregation study)

3. Real estate operations accounting (emphasis on depreciation and NOL)

4. Sale of real estate accounting

5. Tax planning opportunities (start-up deductions, exit strategies)

To make the content of the course easier to digest we will use a fictitious company, launched by Niva. Niva is interested in the real estate business. As a prudent investor, she recruits a world-class team of advisors to help her purchase and manage her first rental property. She brings on board a great broker, residential real estate attorney, accountant, property management company, and an inspector. As a brilliant real estate investor, she knows that many people have made catastrophic mistakes. She intends to reduce the likelihood of making those herself. After the acquisition, the property management oversees daily operations, while she focuses on overall asset management.

To ensure the learning in the course, we will make a number of assumptions in an effort to cover all the major parts of the real estate transactions, their respective accounting, and potential tax consequences.

Who this course is for:

Real estate investors
Property managers
Other real estate professional
Owners of accounting/tax firms
Small real estate property owners
Any person seeking to build their knowledge of accounting for real estate

Accounting for Real Estate: Real Estate Accounting

What you'll learn

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Course content

Introduction2 lectures • 5min

Accounting for pre-acquisition costs4 lectures • 23min

Accounting for Acquisition costs6 lectures • 46min

Accounting for Rehab Costs4 lectures • 23min

Holding Period: Operations Stage4 lectures • 19min

Accounting for Sale of Rental Property2 lectures • 6min

Additional Lecture: Accounting for Investors1 lecture • 4min

BONUS Model: Yeto Real Estate Company5 lectures • 30min

Requirements

Description

Who this course is for: