Tips to streamline tax season for real estate investment managers

By Mike Sebastian February 24 2021 10 min read
08 2021 taxseasontips

From years of working with real estate Investment management clients, we see a huge need to streamline tax season processes. When you understand the value in efficient, cost-effective strategies, the annual tax season can be stress-free for you, your clients, and your CPA. Having an efficient, robust system that organizes and stores data with your K-1s in mind is essential for navigating tax season with zero stress and less effort.

Tax season processes slow a real estate investment management team down. Investors may not understand the processes and requirements of tax filing preparation. Keeping your clients informed, without constant phone calls and emails, builds confidence in your team. Below are four tips to help you eliminate frustration for your team and enhance investor service.

Step 1: Start with organizing all investment/project information in one central hub

Include tax IDs, project name, address, and pertinent details in each asset file. This ensures that no project/investment documentation goes missing or is compromised.

Step II: Store investing organization or individual contact data in one easily accessible place

Tracking down information at the last minute is like chasing unicorns. You might get lucky, but creating a record system that contains all relevant information earlier is a better option.

This record should include:

  • Tax ID
  • Entity type, such as LLC, corporation, single-owner, sub -chapter S subsidiaries, etc.
  • A way to verify contact information for your investors
  • Equity/owner share for each investment
  • Contributions, distributions, and unreturned capital information

Step III: Provide information to your tax professional or CPA

Your CPA needs an organized, accurate record to file your business return. Whether you are using database formats or multiple spreadsheets, set up your system to automatically pull information from individual records into a single spreadsheet document to eliminate human error such as duplication or incorporate postings among entities. Transfer your investment management records to your CPA in a secure format.

Step IV: Distribute K-1s to investors

Establish a secure, streamlined system to share K-1s with investors once the CPA supplies that information. Be sure your system allows your investors 24/7 self-serve access to financial documents. Posting these records behind a secure login on your website saves you time and enhances transparency.


Tax season is a difficult time for many real estate investment managers, especially those who use paper-based and spreadsheet-based accounting systems. Printing, collating and organizing individual records is time-consuming and cumbersome. Sending out dozes of emails with password protected attachments demands a huge time investment. And, sending paper files via snail mail means your staff must shelve other important work to prepare, preview and post each file one at a time.

Beyond the expense and time demands, investors may lose all or part of their package, or the reports could be lost in the shipping process. For all these reasons, having a system in place that organizes your records and efficiently distributes each K-1 to your investor pool is incredibly important, especially during this already stressful time.
You could follow these four tips and save time and money. Or, you could choose a technology partner with the tools and resources you require such as AppFolio. AppFolio Investment Manager does the heavy lifting for you, resulting in a streamlined accounting system throughout the year. And, you can upload and share your K-1s with all investors individually in less than three minutes.

Tax season is often viewed as a headache for real estate investment managers, but it doesn’t have to be. Purpose built real estate investment management software is the best way to streamline tax season.