Accounting for Real Estate: Real Estate Accounting

From Acquisition to Sale

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.