David Van Halteren is a Canadian citizen and resident who owns multiple real estate investments in the United States. He began investing in the U.S. real estate market in the early 2000s, and he has personally felt the effects of the real estate crisis of the last decade.
David currently holds investments in one national real estate fund, along with several standalone investments in residential single-family and multi-family buildings, scattered throughout the U.S.
Before 2009, David’s U.S. investments had little complexity. Since he only held stakes in real estate funds, he simply received K-1s from the funds, which the fund’s CPA then used to file a simple U.S. tax return.
Once he began standalone investing in single-family and multi-family homes, though, David’s situation grew more complicated. He now had units in multiple U.S. states, along with his existing investment in the real estate funds, and he was receiving information from multiple property managers on a monthly basis. His tax structure, although simple, did not limit his liability in any way—all units were owned in his name.
David was also concerned about the large amount of information he was receiving from property managers. There was no unified set of financial information he could present to his Canadian accountant, and he worried about not being compliant in his home country.
Having had extremely minimal contact with his prior U.S. tax preparer, David approached Dedicated CPA, looking to find answers to these critical questions:
After careful discussion between David and our firm, we decided our engagement would have the following components: We would first analyze his situation, considering the specific situation Canadian investors face, with respect to investment in the U.S., and recommend a tax structure that would minimize both tax and liability exposure; On an annual basis, Dedicated CPA would compile all financial information and prepare summary reports for his Canadian Accountant. Additionally, Dedicated CPA would prepare U.S. Federal and State tax filings, as required, and our firm would remain available on a continual basis as tax and strategic advisors.
Our first step was to transition from personal ownership of standalone properties to ownership under entities that would:
After selecting the right structure for the client, we assisted in changing ownership from the client’s own name to the chosen entity, by serving as liaison between the client and the attorneys in all states where property was owned. Once ownership under the new entities was established, we proceeded to review the last few year’s U.S. tax returns, to ensure everything was reported and that no errors were made.
With the new structure in place, David is now in a position for smooth sailing. Dedicated CPA prepares annual reports and tax filings, and we are available to David whenever he needs us. Whether he is getting ready to buy or sell one of his properties or engage in new ventures altogether, we assist him, and we bring with us all of our knowledge of his existing investment structures.
David now sleeps easy, knowing that his investments are protected, that his tax and liability exposure are minimized, and that he is in full compliance, both in the U.S. and in his home country. In his own words, “Worth every penny!”