Real Estate Tax Accountant Checklist: Credits and Write-Offs Most Portfolios Miss

Real estate offers unusually rich tax benefits, yet many investors leave money unclaimed. Industry surveys routinely show that a substantial number of real estate owners miss eligible deductions, which can mean thousands of dollars lost per year. A seasoned real estate tax accountant brings discipline to the process, uncovering credits, structuring documentation, and aligning deductions to cash flow.

This checklist highlights the role of a real estate CPA when it comes to where portfolios commonly leak value, how to tighten records for audit readiness, and ways to connect tactics with individual tax planning goals.

Acquisition & Depreciation Wins: Credits Most Investors Overlook

Cost Segregation and Bonus Depreciation Playbook

A real estate tax accountant looks first at depreciation speed. Cost segregation reclassifies parts of a building into 5, 7, or 15-year property instead of 27.5 or 39 years. Engineering-based studies often shift roughly 20%–35% of basis into these shorter lives, which front loads deductions and improves early cash flow.

Actionable Steps to Take:

• Identify and map components like electrical, finishes, parking lots, and landscaping.
• Commission an engineering-supported study, then time the placed-in-service date for maximum impact.
• After renovations, stack partial asset dispositions to write off the remaining basis of replaced systems.

Note:

For qualified property acquired and placed in service after January 19, 2025: 100% bonus depreciation is available (subject to the written binding contract and acquisition rules).

For property acquired before January 19, 2025: the phasedown applies, 40% bonus in 2025, 20% in 2026, and 0% in 2027 and beyond.

Energy-Focused Credits and State Incentives

A real estate CPA also screens for energy and local benefits.

• Evaluate potential Section 179D energy-efficient commercial building deductions and utility rebates where upgrades qualify.
• Track state or municipal programs that reward improvements, such as solar or building envelope incentives.

Pro Tip: Partner Early

Engage a Real Estate Tax Planning Firm during due diligence. With acquisition and placed-in-service timing now determining access to 100% bonus depreciation, modeling after-tax returns is time-sensitive.

Consider accelerating closings or renovation timelines where it aligns with eligibility for 100% bonus depreciation.

Operating Expenses & Bookkeeping: Everyday Deductions That Add Up

Operating Write-Offs Your Real Estate CPA Will Not Miss

Daily activity produces legitimate deductions that frequently slip through the cracks. A methodical real estate CPA reviews the following:

• Repairs versus improvements, supplies, lock changes, and reasonable tenant gifts
• Insurance, legal, bank fees, advertising, screening costs, and leasing commissions
• Travel tied to management, mileage logs, and a business-use home office

Bookkeeping & Accounting Services for Real Estate

Clean data drives accurate returns. Purpose-built bookkeeping & accounting services for real estate keep documentation audit ready and actionable.

• Property-level profit and loss statements, class tracking by asset, and organized evidence files
• Monthly closes, receipt capture, capitalization thresholds, and W-9 or 1099 workflows
• Expense categorization rules that keep repairs correctly deductible rather than capitalized

Status, Structure & Individual Tax Planning Alignment

Real Estate Professional Status and Material Participation

Investors who qualify for Real Estate Professional status can use rental losses against other income. The IRS requires at least 750 hours annually and more time in real estate than in any other trade. A real estate tax accountant helps build contemporaneous logs, consider grouping elections, and deploy passive losses strategically.

• Track hours by activity and property, then review quarterly
• Apply grouping elections to unify related activities for participation tests
• Coordinate documentation before year end to avoid last-minute scrambling

Entity Structure That Supports Deductions

Choice of entity influences tax results and risk profile. An LLC taxed as a partnership suits many buy-and-hold investors, while an S-corp can fit active management income.

• Align operating agreements with allocation rules, guaranteed payments, and distribution timing
• Review multi-member arrangements so special allocations have economic substance

Individual Tax Planning Touchpoints

Portfolio strategy should link to household-level decisions. Coordinating deductions through individual tax planning can reduce effective rates.

• Evaluate passive losses, Net Investment Income Tax exposure, and Qualified Business Income optimization
• Time retirement and HSA contributions around major transactions to smooth adjusted gross income

Exit, Exchanges & Capital Gains Deferral

1031 Exchange Essentials a Real Estate CPA Reviews

Deferring capital gains through a 1031 exchange preserves equity for the next deal. Rules are strict.

• Identify replacement property within 45 days and close within 180 days
• Coordinate a qualified intermediary, document identification correctly, and avoid receiving sale proceeds
• Consider reverse or improvement exchanges for complex timelines

Other Gain Strategies When 1031 Is Not Ideal

Not every exit fits a 1031. A real estate CPA may map alternatives.

• Installment sales that spread gain over time
• Opportunity zone investments where the business case and timelines match
• Loss harvesting across the portfolio to offset realized gains

Conclusion

Strong tax outcomes rarely happen by accident. A rigorous playbook, accurate records, and consistent review by a real estate tax accountant or real estate CPA will uncover deductions, capture credits, and keep documentation ready for scrutiny.

Investors seeking deeper modeling and transaction support can work with GavTax Advisory Services, a trusted Real Estate Tax Planning Firm that delivers strategy and execution tailored to property portfolios.

Book a consultation with Gavtax and align your returns, your records, and your individual tax planning in one plan.

FAQs

1. Do I need both a property manager and a real estate CPA?

Yes, the roles differ. Managers run operations and tenants. A real estate CPA builds the tax strategy, documents compliance, and translates activity into accurate returns.

2. Which expenses typically move the needle first?

Cost segregation–driven depreciation often has the fastest impact. Under current law, 100% bonus depreciation applies only if the property is both acquired (generally not under a written binding contract dated on or before Jan. 19, 2025) and placed in service after that date; otherwise phasedown rates apply.

3. How often should my books be closed and reviewed?

Monthly closes supported by bookkeeping & accounting services for real estate help capture deductions in real time. Quarterly strategy check-ins keep the plan aligned with individual tax planning targets and upcoming transactions.