Do you want to read more about Accounting for Flipping Business in Real Estate then read this informative post from world’s leading accounting expert.
Flipping business in Real Estate demands meticulous accounting abilities. The nature of business involves earnings from selling houses. There are different factors that affect the same like maintenance, repairing, renovation, etc. That’s why the accounting system required for the flipping business is very different from the rest of the industries.
The cost factor: Calculation and Maintenance cost in flipping business can be challenging as there are numerous costs attached to the process like acquisition cost of a house, repairing and holding costs, selling cost, etc. and for that a proper and well structured accounting system is required. We have professionals who have sound knowledge and have good hands on accounting software to deal with these requirements.
Receipts of expenses: Accounting for flipping business also depends on the receipts of various expenses done at the external level, like for repairing of houses; receipts of restoration or rehab is required, in the same way account statements and credit card statements are also necessary. This requires a very accurate method of accounting which we deliver to our many satisfying clients.
Trade or investment: The tax that applies on the real estate depends on the time of the assets for which it’s being hold. If there is a frequent flipping of houses than it falls under the category of trade and the taxes applied on it are different, whereas for the asset being held for longer than a year, the capital gain tax is applied. Thus, maintaining the books of accounts for tax purpose becomes very essential for a flipping business.
Method of accounting: Flipping business accounting method varies from business to business like cash method or the accurate method. Choosing one from those tends to make impact on the tax calculation. We at Meru Accounting have a team of professionals to look after this sensitive matter and deliver the best results to our flipping business clients.