REAL ESTATE CPA - ARTHUR S. LAZARUS, CPA - Hollywood, FL

Tax Strategy Built for Real Estate Investors, Not Just Homeowners

Real estate is one of the strongest ways to build wealth — but it comes with real tax complexity. A CPA for real estate investors helps you navigate depreciation schedules, cost segregation studies, 1031 exchanges, and passive activity loss limits, while keeping your investments IRS-compliant.

Book a Free Consultation

Call (754) 400-0414

Licensed CPA (FL #AC61458) 1031 Exchange Guidance Portfolio Advisory Real Estate Professional Status (REPS) SERVICING FORT LAUDERDALE - HOLLYWOOD, FLORIDA & ALL 50 STATES

Tell us about your Accounting needs.

Schedule a 15-minute call with a CPA.

Depreciation and Cost Segregation

Common Tax Questions Real Estate Investors Ask

Residential rental property gets depreciated

Residential rental property gets depreciated over 27.5 years under IRS rules. Commercial real estate is different, it follows a 39-year straight-line schedule instead (see IRS Publication 527). That's the standard path, spreading the deduction out evenly for as long as you hold the property. A real estate accountant can speed that up, though, using something called cost segregation.

How it works

Rather than treating the whole building as a single asset, a cost segregation study looks at individual components separately. Things like lighting, carpeting, millwork, land improvements, and paving all get pulled out and usually reclassified into shorter recovery periods of 5, 7, or 15 years.

Tax Impact

Pulling more depreciation into the early years means bigger deductions right away, which lowers taxable income sooner and puts more cash in hand for the next acquisition.

Evaluation

This strategy tends to pay off most for residential units, commercial spaces, and short-term rentals, particularly ones with a lot of upfront capital spent on purchase or renovation. A qualified CPA should still be part of the process, though, to make sure the depreciation schedule actually matches IRS asset classes and doesn't create compliance headaches later.

1031 Exchanges

Real estate investors have a way to defer taxes when they sell: Section 1031 of the Internal Revenue Code. Normally, selling an investment property means owing both capital gains tax and depreciation recapture tax right away. Section 1031 pushes that bill down the road instead, but only if the sale proceeds get reinvested into a "like-kind" replacement property.

That deferral doesn't come easy, though. The IRS holds investors to a strict set of deadlines and procedural steps, and missing any one of them can unravel the whole exchange.

It starts with the Qualified Intermediary (QI). Before the sale of the relinquished property even closes, a QI has to already be engaged, since the investor is never allowed to touch or control the sale proceeds directly, not even briefly, at any stage of the transaction.

From there, the clock starts ticking. Within 45 calendar days of closing on the original property, the investor has to formally identify potential replacement properties in writing to the QI. Then comes the second deadline: the replacement property has to close within 180 calendar days of the original sale, or by the due date of that year's tax return, whichever comes first.

Passive Activity Loss Rules

IRS Code

Most rental income and losses fall under IRS Code Section 469, which labels them "passive." In practice, that means a loss from your rental, say from depreciation, usually can't touch your W-2 paycheck or 1099 income. It can only offset other passive income, like earnings from another rental or a passive business stake.

Two ways around

There are two ways around that limit, though, and both come with conditions attached. One is the $25,000 Special Allowance. If you actively manage your own rental and your Modified Adjusted Gross Income stays under $100,000, you can write off up to $25,000 in rental losses against your active income. Push past that MAGI threshold, and the allowance starts shrinking, vanishing completely by $150,000.

Bigger Route

The other route is bigger, but harder to earn- Real Estate Professional Status, defined under Section 469(c)(7). Hit this status, and your rental losses stop being "passive" altogether, they get reclassified so they can offset active income without limit. Getting there isn't casual, though. It takes more than 750 hours a year working in real property trades or businesses you're materially involved in, and real estate has to eat up more than half of all the hours you work, period.

What You Get

What’s Included in Our Real Estate Accounting Services

Our real estate investor tax planning framework covers the full life cycle of property ownership—from acquisition entity setup to long-term portfolio tax optimization.

Rental property accounting

Accurate books for single and multi‑property portfolios.

Cost segregation study support

Guidance on whether a study is worth it for your property.

1031 exchange tax planning

Compliance with IRS timelines and reporting.

Passive activity loss analysis

Strategies for offsetting losses and qualifying as a real estate professional.

Depreciation schedules

IRS‑aligned schedules for residential and commercial property.

LICENSED, NOT OUTSOURCED

The CPA Behind Your Real Estate Tax Strategy

Founder & Managing Partner — Licensed in Florida (AC61458) and Maryland (13054)

Arthur S. Lazarus, CPA

Founder & Managing Partner — Licensed in Florida

Arthur Lazarus is a CPA licensed in Florida and Maryland, with a Master's in Taxation, and a member of the FICPA, the Fort Lauderdale Chamber of Commerce, and the Hollywood Chamber of Commerce. Real estate tax situations vary widely depending on portfolio size, entity structure, and investment strategy, which is why depreciation, cost segregation, and 1031 decisions are handled based on your specific holdings, not a set formula.

Find out more about Arthur: https://www.linkedin.com/in/arthurlazaruscpa/

The Solution

Why Choose Arthur S. Lazarus, CPA as Your Real Estate CPA?

Choosing a CPA for real estate investors means working with a professional familiar with real estate financing, tax elections, and regulatory requirements to create a tailored real estate tax strategy for you.

business-professionals-meeting-in-a-conference-room

Proactive Year-Round Advisory

Real estate tax decisions—such as timing property sales, starting cost segregation studies, or initiating 1031 exchanges—cannot be handled after year-end. We provide continuous support throughout the year before deals close.

Customized Portfolio Strategies

We avoid generic accounting templates. Every property portfolio receives custom depreciation analysis, expense categorization, and entity evaluation based on actual operational data.

Market Knowledge & Distance Capability

As a firm based in Hollywood, Florida, we're familiar with how real estate works in South Florida. Arthur is also licensed in Maryland, and we work with real estate investors across the country as part of our practice.

Who This Is For

CPA for Real Estate Investors

Single Family and Multi-Family Landlords

Long-term property owners who wish to maximize Schedule E deductions and maintain proper record keeping for their balance sheets.

Commercial Property Owners

Real estate investors with retail, industrial, office, or storage properties that need to prepare complicated depreciation and lease calculations.

Short-Term Vacation Rental Operators

Vacation property hosts in need of advice about material participation, transient occupancy tax issues, and the use of active losses.

Real Estate Developers/Flippers

Active real estate investors using hold/flip strategies, wholesaling, and major property renovations that necessitate proper inventory management.

High Net Worth Investors

Investors who require advanced real estate tax planning including REPS eligibility assessment, 1031 exchange, and estate planning considerations.

Talk to a Real Estate CPA

Four Steps to Maximizing Your Real Estate Returns

Initial Call

We assess your portfolio size, deal flow, current tax structure, and primary goals.

Portfolio Review

We analyze your past two tax returns, depreciation schedules, and operating agreements.

Custom Strategy

You receive a clear tax plan outlining cost-seg options, entity tweaks, and savings estimates.

Execute & Scale

We handle bookkeeping, tax filings, and deal planning as your portfolio grows.

Talk to a Real Estate CPA

Who We Help

Costly Tax Mistakes Real Estate Investors Make

Missing Valuable Depreciation

Not claiming available depreciation can mean leaving tax savings on the table and creating issues when you sell.

Getting 1031 Exchanges Wrong

Strict rules and deadlines make 1031 exchanges easy to mishandle. One mistake can lead to an unexpected tax bill.

Choosing the Wrong Business Structure

The wrong structure can create unnecessary taxes and headaches as your portfolio grows. We help you choose what fits your goals.

Overlooking Cost Segregation

Standard depreciation may leave potential tax savings unused. A cost segregation study can uncover opportunities to accelerate deductions.

Confusing Cash Flow With Taxable Income

The money flowing through your bank account isn't always what you'll owe taxes on. Knowing the difference helps prevent costly surprises.

How Does a Real Estate Accountant Help With Rental Property Taxes?

Rental property comes with more moving tax pieces than most owners expect. A CPA for Real Estate Investors tracks what's actually deductible, applies depreciation the right way, and catches the kind of errors that tend to draw IRS attention. For a lot of investors, that also means looking at whether a cost segregation study makes sense to accelerate depreciation, or structuring a sale so it qualifies for 1031 exchange treatment instead of triggering a full tax hit. Passive activity loss rules add another layer, especially once other income enters the picture. Owners with several properties or multiple entities run into a different problem too: keeping each property's numbers separate and defensible, not just lumped into one portfolio total.

Talk to a Real Estate CPA

FAQ

Common Questions About Tax Planning

Do real estate investors need a CPA?

Not every investor needs one, but most benefit significantly once they own more than one property, are considering a 1031 exchange, or are claiming rental losses against other income. The passive activity loss rules, depreciation recapture, and exchange deadlines all have hard boundaries with no room for a mistake to be corrected after the fact. A CPA for Real Estate Investors is more likely to catch these before they become a problem.

What is cost segregation and is it worth it?

It reclassifies parts of a rental into shorter depreciation windows of 5, 7, or 15 years instead of 27.5 or 39, so deductions land earlier. Worth it depends on the property's value and whether you've got enough passive income to use the bigger write-off.

How does a 1031 exchange affect my taxes?

You're not avoiding the tax, just pushing it down the road; the gain carries into the replacement property's basis instead of getting taxed at sale. Miss the 45-day ID window or the 180-day close, and the whole exchange falls apart. It is wise to approach a 1031 exchange tax accountant to guide you in this regard.

What are passive activity loss rules?

They're the IRS rules under Section 469 that limit rental losses to offsetting passive income in most cases, rather than wages or other active income. Two exceptions open that up: the $25,000 special allowance for active participants under a MAGI threshold, and real estate professional status for investors who meet stricter time and participation requirements.

Do you work with out-of-state property owners?

Yes. Many of our real estate investor clients own property outside Florida, and we coordinate the federal tax treatment alongside whatever state-level filing obligations those properties create.

Get Started Today