Accounting for Real Estate in Atlanta

Presti & Naegele helps Atlanta investors structure their rental property businesses for both protection and operational efficiency. Choosing the right entity helps safeguard your assets and improve how your real estate investments are managed.

✔ A Limited Liability Company (LLC) combines the simplicity of a sole proprietorship with the personal liability protection of a corporation. For those using real estate accounting in Atlanta, forming an LLC provides both risk mitigation and flexible tax options.

With an LLC, rental income flows straight to your individual tax return, sidestepping corporate-level taxes. You can also deduct qualifying property-related costs, such as repairs and interest payments. In Atlanta’s competitive real estate market, having an LLC can elevate your credibility with both tenants and business contacts. LLCs remain a favored structure for their flexibility, protection, and ease of use—though some real estate professionals in Atlanta may also find S Corporations beneficial under specific conditions.

Legal Structure: How real estate owners pay taxes depends on the structure of their business.  At P&N, we can evaluate your situation and recommend the right entity for your business.

Sole Proprietorship – A sole proprietorship is the simplest form of business, where the owner and the business are one.

Limited Liability Company (LLC) – An LLC combines the liability protection of a corporation with the flexibility of a partnership.

Partnership – A partnership involves two or more individuals or entities sharing ownership and responsibilities.

S-Corporation – An S-Corporation is a pass-through entity that combines features of

corporations and partnerships.

UNDERSTANDING ACCELERATED DEPRECIATION in Atlanta

Atlanta property owners can use strategies like accelerated depreciation to improve tax efficiency. Our Real Estate CPAs help clients apply this method to take advantage of tax benefits earlier in the ownership cycle.

Depreciation spreads out the cost of a property over time, reflecting its natural wear and decline. While residential rental properties are usually depreciated over 27.5 years, accelerated depreciation allows Atlanta investors to front-load deductions and reduce taxable income in the early years.

How Does Accelerated Depreciation Work?

Passive activity refers to an investment or business where the taxpayer is not actively involved. When your expenses from these activities exceed the income generated, it creates passive activity losses (PALs).

In Atlanta, rental income typically qualifies as passive. Common expenses—like property maintenance, mortgage interest, insurance, and depreciation—can all contribute to passive losses. This also applies to limited partnerships or real estate investments in Atlanta where involvement is minimal.

Exceptions to the passive loss rules include:

• $25,000 Allowance: If you actively manage the real estate and earn less than $100,000 during the year, you can deduct up to $25,000 in passive losses against ordinary income.



• Real Estate Professionals: Real estate professionals who materially participate in their real estate activities are not subject to the same passive loss rules. They can use real estate losses to offset income from other active sources.
  

Material participation is a key factor. If you actively manage the real estate (e.g., handle day-to-day operations), your losses may not be strictly passive. Real estate professionals who meet specific qualifications can also avoid the passive loss treatment.

Selling an investment property in Atlanta and reinvesting in another allows you to defer capital gains taxes through a 1031 exchange. Funds must be held by a qualified intermediary and cannot be received directly. “Like-kind” means both properties must be used for similar investment purposes—not necessarily the same type—like swapping a commercial property for raw land or a multi-family building for a warehouse.

Atlanta investors can use this strategy repeatedly to grow their portfolios while deferring tax payments. Taxes only apply once a property is sold outright for cash. In certain cases, even a former personal residence may qualify based on how it’s used.

Strategic Advisory for Real Estate Growth in Atlanta

Move confidently through Atlanta’s fast-paced real estate market with guidance from our seasoned Real Estate CPAs. Our real estate accounting services in Atlanta are tailored to the needs of local investors, helping you identify opportunities, stay tax-efficient, and make informed decisions. Presti & Naegele is a trusted resource for property owners throughout Atlanta.

STREAMLINE FINANCIAL OPERATIONS WITH QUICKBOOKS EXPERTISE

Bookkeeping is a foundational part of successful property management in Atlanta. Our QuickBooks services are customized for real estate clients, helping you stay organized and efficient. With real estate accounting in Atlanta from Presti & Naegele, you’ll have access to accurate financial records across your entire portfolio.

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