Not Incorporating Outside Bank Account Accounting into Your Management Company P & Ls and Balance Sheets
This should be done before you submit your information to prepare your tax return.
2. Incomplete Investor Lists
There's a certain amount of information that you have to get from investors to be able to produce a K-1. Missing information can hold up returns for as much as two or three weeks!
3. Properties Not Recorded On The Balance Sheet of the Management Company
The cost basis of the property as well as loan and closing costs are missing from the management company balance sheet because the entry to record the closing was not provided to them.
4. Not Providing the Correct Information for Single-Member LLC Partners
IRS requires BOTH the name and tax id number of the LLC and the name and social security number of the single-member owner.
5. Not Having Continuity of Information
I have seen some clients change management companies during the middle of the year. This created huge issues with the continuity of information. This is because the new management company didn't start their time with the balances from the old management company. So, these things had to be combined to prepare the tax return.
6. Giving Tax Advice
I see a lot of syndicators making the mistake of providing tax advice to their investors. If somebody screws up their tax return based on advice they got from the operator, they may blame you. Just give them their K-1 and tell them they need a CPA!
AVOID THESE MISTAKES AND GET YOUR K-1'S OUT FASTER!
What are you waiting for? Click below to download our comprehensive syndication checklists!
