Owner trust fund tracking, security deposit compliance, and development cost capitalization for property managers and developers.
Property managers and developers face a fundamentally different accounting problem than a typical investor holding property long-term. Managers collect and disburse other people's money at scale, tenant rent, owner distributions, security deposits, each requiring its own trust-style tracking. Developers face complex rules around capitalizing construction costs versus expensing them. Hasco Tax Advisors works with both, building books that match how these businesses actually operate.
Most states require tenant security deposits to be held in a separate trust or escrow account, distinct from both the property owner's funds and the management company's operating funds. This is a legal requirement independent of tax treatment, and many states impose specific penalties for commingling deposit funds with operating cash.
A property management company collects rent on behalf of owners, deducts its management fee, and disburses the remainder. Each of these three flows needs to be tracked separately: the fee is the management company's taxable revenue, the rent collected on the owner's behalf is not, and getting this distinction wrong overstates the management company's actual income.
Construction and development costs generally must be capitalized into the property's basis rather than deducted immediately, but the line between a capital improvement and a deductible repair is not always obvious, and getting it wrong in either direction creates a return that will not hold up under scrutiny. Interest on construction loans during the build phase is also typically required to be capitalized rather than deducted currently.
Developers who build and then sell often use 1031 exchanges to defer gain into the next project, but the strict 45-day identification and 180-day closing deadlines require real coordination with a qualified intermediary well before the sale actually closes.
Rent collected on behalf of property owners tracked separately from management fees, so your true revenue is never overstated.
Tenant security deposits held and tracked in compliance with your state's trust account requirements, reconciled property by property.
Construction and development costs classified correctly between capitalized improvements and deductible expenses, project by project.
Financial statements broken out by property, so owners and internal decision-making both have real, property-level visibility.
Join the individuals and business owners who trust Hasco Tax Advisors with their most important financial decisions. Your first consultation is completely free, and you will leave it with a clear, direct answer on what is needed and what it costs.