Accounting Services for Real Estate Developers
Real estate development has complicated transactions and documentation: purchase orders for materials, subcontractor labor, architect bills, change orders, progress billing and tenant improvement work that blurs repair vs build. When those details are recorded in the books late — or in the wrong bucket — cash flow and taxation naturally get distorted. That’s where accountants for real estate developers step into the picture.
What Should You Expect from Accountants for Real Estate Developers?
Job-costing bookkeeping, monthly closes, financial statements and taxation support custom-built around projects should be expected — not just a general ledger. The target for clients is to observe where the amounts went, what is capitalized, what is deductible and what each project actually earned. Our specialized accountants for real estate developers perform the below actions:
- Project setup by phase and cost code
- Progress billing tracking + draw support
- Vendor and contractor compliance — W-9 collection, 1099 prep, lien waiver tracking
- Capitalization vs expense reviews for land, soft costs and construction costs
How Do You Keep Project Books Precise When Invoices Arrive Late?
Precision is ensured by matching costs to the period and project they belong to — even if the invoice appears weeks later. A real estate developer CPA generally leverages a close checklist — that captures commitments and timing distinctions in order to reflect reality. In this sense, we follow a solid month-end routine as outlined below:
- Reconciliation of bank & credit card activity to the correct job and vendor
- Recording accruals for approved pay apps & stored materials and open scope changes
- Comparing cost totals to budgets — so overruns show up early — not after closeout
- Confirming loan activity and escrow movements — so financing reports line up
Which Tax Issues Tend to Surprise Real Estate Development Companies?
Such issues generally come from categorization, timing indicators and entity structure. Paying attention to such fields presents aid in lowering surprises. We can list the pressure points as follows:
- Carrying costs during pre-development and construction
- Depreciation timing once a property is placed in service
- Treatment of tenant build-outs and site improvements
- Sorting costs between inventory & fixed assets and current deductions
- Multi-state activity when projects and investors along with contractors span locations
When Should You Consider a Cost Segregation Study?
Cost segregation study generally pays off when a newly built or acquired property has major components that satisfy qualification criteria for faster depreciation. The benefit is simple: earlier deductions that have the potential to improve after-tax cash flow. This study is considered a quality preference when you have:
- A completed build or major renovation or newly acquired commercial property
- Meaningful site work & interior build-out or dedicated systems
- Taxable income you want to offset sooner — rather than later
What Entity Options are Common in This Business Line?
The most general ones are LLCs, partnerships and corporations. They are chosen to satisfy investor needs & lender requirements. The better option simply varies in line with the deal model and how profits are shared.
| Entity type | Use case | Accounting and taxation notes |
| LLC (single-member) | Smaller & owner-led projects | Simpler reporting; still needs strong project cost tracking |
| Partnership / multi-member LLC | Deals with multiple investors | Allocations should follow the operating agreement and capital accounts |
| S corp | Active owners paid a salary | Works in some service-heavy models; less common for property holding |
| C corp | Specific reinvestment plans | Double-tax risk; generally reserved for special cases |
Want to Work with Dimov Tax?
If you want financials that fully comply with what’s happening on-site and at closing, contact us today. Our professional accountants for real estate developers are ready to lay out a solid plan.
FAQs
How do accounting services for real estate developers handle retainage and holdbacks?
Accountants for real estate developers perform tracking of retainage in a separate job-level balance and clear it — when releases are paid.
What does a real estate developer CPA do to separate land, soft costs and construction costs?
They build cost codes & posting rules. By such actions, each distinct bill arrives in the correct bucket and compliance with the reports and the deal is maximized.
What does real estate development tax planning cover for developer fees and overhead?
Such planning sets a documented method in order to allocate fees and internal costs properly by project — so filings link with the books.
Do accountants for real estate developers handle sales tax and use tax on materials?
Specialized accountants review where materials are purchased and used. Then they present support to the necessary filings for those states.
What documents do you need for a cost segregation study?
Plans & invoices and a fixed-asset list with placed-in-service dates — are generally enough to build such study.
Can accounting services for real estate developers prepare lender reporting packages?
They produce lender-ready packages from reconciled books — covering draw schedules & covenant metrics.