A real estate industry CPA understands that accounting for real estate is unique. Standards, rules and regulations surrounding accounting and auditing for real estate transactions vary substantially from other CPA specialties. Accounting real estate professionals must be able to identify accounting and auditing problems surrounding real estate transactions and come up with solutions that benefit their clients.

To specialize in real estate accounting and to become a real estate CPA, it is necessary to acquire specialized training and education to fully understand the intricacies in the arena of real estate accounting services. Enhance your chances of being considered by real estate CPA firms with the following CPAs and firms specializing in the real estate industry education and training musts:

1. Purchase real estate accounting reference materials to maximize and complement any training or learnings.

2. Attend educational seminars that touch on accounting real estate subjects.

3. Learn at your own pace with accounting real estate self-study courses or materials.

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Maximize your learnings with real estate accounting reference materials

There are a lot of detailed laws and regulations that real estate CPAs must keep track of. While it is virtually impossible to memorize them all -- an up-to-date reference book readily available will allow you to tap into this knowledge whenever needed.

I recommend: The Thomson Reuters/RIA Federal Income Taxation of Real Estate Guide covers current real estate tax laws, rules and regulations, including real estate income sheltering guidance. Maria K. Davis' reference book entitled "Accounting for Real Estate Transactions: A Guide For Public Accountants and Corporate Financial Professionals" covers real estate accounting rules. It can be purchased via the John Wiley & Sons website.

Attend educational seminars covering accounting real estate subjects

Educational seminars allow you to learn and interact with experts in the field. CPA real estate seminars will give you the opportunity to ask questions of these subject matter experts as well as network with other industry peers.

I recommend: CPA-Resource's seminar entitled "The 8 Greatest Estate Planning Techniques" and The Center for Professional Education's seminar "Financial Accounting & Reporting Real Estate Transactions" are intended to broaden one's understanding of real estate accounting.

Complete accounting real estate self study courses

Self study courses allow you to learn at your own pace; slowing down at challenging parts and breezing through easier sections. Additionally, these types of courses allow you the benefit of learning without taking away time from your job.

I recommend: CPA2Biz provides a self-study course in Real Estate Accounting and Auditing. The National Tax Institute's self-study curriculum includes a course called "Critical and Legal Tax Issues for Accountants," covering the topic of real estate legal and tax matters and their tax ramifications.

Tips & Tactics

Helpful advice for making the most of this Guide

• •  When searching for educational opportunities to become a real estate industry CPA, be on the lookout for courses that offer continuing education credits (CEUs) toward your CPA licensure. This will allow you to kill two birds with one stone by specializing in the real estate accounting field and keeping your license current by taking courses that satisfy mandatory CEU requirements.

When a small real estate business owner is ready to delegate the company finances, a commercial real estate accounting firm is usually the best answer. An accounting or CPA firm is familiar with all aspects of taxation and auditing. Partnering with an accounting firm can save you a lot of time, money and tears.

You must also choose whether you want to partner with a general financial institute, or a specialized firm. Most of the time, picking a CPA or accountant that specializes in the real estate industry makes the most sense. A real estate specific accountant will be experienced in several major construction industry issues, including dynamic and diverse laws in different states and countries, contract and tort liabilities, and financing and capital.

Choosing a CPA that specializes in real estate industry also ensures the following:

1. It will be easy to communicate your needs to CPAs and firms specializing in the real estate industry.

2. They can offer qualified, industry-specific suggestions to help you get the most out of your revenue.

3. They have the right tools and knowledge available to keep your books balanced and your taxes legal.

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Decide what real estate accounting services you need for your small business

Not only are there specialized accounting firms that cater to your specific industry, but their individual services differ also. Make a list of everything you need from a real estate CPA. Where some businesses just need someone to just prepare federal taxes and generate financial reports, others require more complex services.

I recommend: Cherry, Bekaert & Holland LLP and Eide Bailly are both national CPA firms that offer comprehensive, specialized services to the real estate industry.

Choose from real estate accounting firms with reliable customer service

Good customer service is always a priority when you're outsourcing your finances. A company you partner with must offer assistance whenever you need it, as well as knowledgeable customer service representatives. Ask your accounting firm prospects how committed they are to customer service and how they prove it.

I recommend: Plante & Moran is a leading national CPA firm focused on accounting needs for midsize companies. Grant Thornton is also a national CPA firm that provides real estate accounting services.

Pick accounting for real estate that gets you online access

Online access is a must these days, especially if running your business keeps your busy during normal business hours. When you choose a real estate industry CPA, ask what they have to offer in the way of online tools and resources. Some accounting firms offer a library of reading material and client logins, so you can track your account anytime, anywhere.

I recommend: BKD LLP and McGladrey & Pullen LLP both offer many online tools and resources, including web-based client service centers for client contact and convenience.

Tips & Tactics

Helpful advice for making the most of this Guide

• •  The qualifications and experience of a real estate CPA usually differs from those of an accountant. Therefore, your first decision is whether you want an accountant with general bookkeeping knowledge, or a licensed CPA.

Being new to the real estate industry does provide its challenges, such as which real estate CPA to hire. CPAs and firms specializing in the real estate industry for beginners should allow for an excellent starting point for anyone new to the sector. You should know the basic rules and regulations for the industry along with what traits make for a good real estate industry CPA. From there you can engage the various firms to determine which one fits your individual needs.

To obtain the necessary information you can use a variety of accounting for real estate resources. However, three stand out. You can use textbooks and Internet resources, various real estate associations and the legal firms themselves to understand the industry. By utilizing these three avenues, you can establish a solid knowledge base on which you can then choose a firm and lower your real estate costs. However before you begin this process there are few items to consider:

1. Locate accounting real estate resources available on the Internet.

2. Contact industry associations familiar with real estate accounting firms.

3. Speak to CPAs and firms specializing in real estate.

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Use resources for real estate CPA firms available on the Internet

For anyone new to the industry, it's important that you understand the basics of real estate law. This information won't make you an expert but it will provide the necessary information on which you can build this expertise. These resources can range from textbooks to online training classes.

I recommend: John Wiley & Sons and CPA2Biz both offer real estate accounting text for sale online. The Carol group has an excellent article from a real estate CPA on the industry. Review the educational resources available at Train Up.

Request real estate accounting services and references from various industry associations

Whether you're looking to hire a real estate CPA or enter the profession, the real estate associations provide a great resource. These associations have a wide variety of members with decades of experience in the industry. They can provide recommendations as well as educational opportunities.

I recommend: Speak to a representative at the Commercial Real Estate Development Association. The National Association of Realtors is another organization that can help any beginner in the real estate accounting industry.

Utilize real estate specific CPAs and their firms to attain more information

Most real estate specific CPAs and firms will be more than happy to offer up information and educational resources within the industry. These firms also have their own information outlets that can invaluable for any beginner.

I recommend: Call the Real Estate Tax Law center for more industry information. Speak to the real estate CPAs at Dixon Hughes for further details.

Traditional accounting services include the preparation and compilation of financial statements and the auditing and review of these same financial statements. Depending on your real estate financial accounting needs, you may be looking for a financial planner, an auditor or an accountant. An accountant could be a specialist, such as a public accountant, a management accountant, or a certified public accountant. In the real estate industry, a company may need to utilize any combination of financial planners, auditors or accountants.

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Accountant's opinion

An accountant's opinion refers to a generalized report giving an overview of a company's financial wellness. A CPA examines the real estate company's financial records and statements, then writes the opinion and signs it. An accountant's opinion can also be given for a specific real estate transaction, where the opinion encompasses the records surrounding the real estate deal.

I recommend: The Allbusiness.com glossary defines the accountant’s opinion.

Audit trail

An audit trail records the history for every transaction. To comply with industry standards, companies need to make audit trails of their important documents. This is especially important for CPAs and firms specializing in the real estate industry, since there are so many modifications that happen to documents along the way. Audit trail reports contain all transactions and modifications, not just the ending ones that count toward the balance sheets.

I recommend: Synergis Software makes a program simply entitled Audit Trail, which creates an electronic audit trail for your documents.

Internal Revenue Code (IRC)

The federal tax guidelines are contained in the United States' Internal Revenue Code, or IRC. The IRC contains all of the laws enacted regarding federal taxes, including those regarding estate taxes.

I recommend: The United States’ Internal Revenue Service provides more information on the IRC.

Real Estate Mortgage Investment Conduits (REMIC)

Real Estate Mortgage Investment Conduits are mortgage-backed securities. The principals and interests of many mortgages are separated into different classes, then traded as individual securities. A CPA or accounting firm can help clients decide whether or nor this type of investment is right for them.

I recommend: Fannie Mae has a page explaining the details of REMICs.

Real property

Real property refers to property that is land, property directly attached to the land, or natural resources from the land. The business of selling and buying real property comes with a lot of tax implications, especially if the real property is an investment. Ideally it's best to consult a CPA prior to any purchase or sale, so the details that will affect taxes and accounting will be known up front.

I recommend: Investopedia gives a detailed description of what is included in real property.

Real Estate Investment Trust (REIT)

Investors can join with other investors to form a trust. The trust itself does not incur income taxes, but the investors report their portions of the income gained on their own tax returns. Because each investor has his own tax liability, it's important for each investor to also have his own CPA looking out for his interests.

I recommend: The Oklahoma Society of CPAs has a glossary of accounting terms, including REITs.