I am a great believer in working closely with competent CPA's and Attorneys. As a matter of fact, many times it is an absolute necessity. To complete a good Capital Gains Tax Saving Strategy, the Financial Advisor, CPA and Attorney should all be in harmony so that you hang onto as much of your money as possible.
That said, an incompetent or unknowledgeable professional can really cause you great financial harm. Just because someone passed their CPA exam or Bar exam at one point does not make them capable of knowing everything about capital gains. A good professional will either admit to their lack of knowledge, or take the initiative to do the proper research to bone up on the subject. You may have to pay for their research time, however, as most do nothing for free.
Case in point. I have a client in the mid-west. She has been having great difficulty finding a good tax professional in her area (fairly rural). She needs a good professional, as we are considering doing partial 1031 exchanges with her property. The first person she called told her she had no options but to pay taxes on sale.
I set out to find her someone that knew what they are doing. I contacted a "find a good CPA" type of site and told them what I was looking for. They gave me a name and I called them. The fellow seemed to be on the same page, so I had him contact my client.
I then got an email from my client. Someone from his office had contacted her. She told my client she was knowledgeable and preceded to give my client blatant incorrect tax advice without knowing what she was doing or taking a complete financial workup.
I called the CPA I talked to and relayed what the "assistant" said. He promised to contact my client and straighten out the misunderstanding. Then, much to my dismay, he contacted the client and gave more wrong information!
I am not a CPA or licensed tax professional. I can go to the IRS website to verify information I am forwarding, however. I preceded to find the correct information and email it in writing to both my client and the "tax professional".
Needless to say, my client will not be using this particular CPA. What a complete waste of precious time and energy, however. This is exactly what I was trying to avoid in the first place.
I have had very similar experiences with attorneys. They may be great at some things they do on a regular basis. However, many will not do their research on something they are not familiar with before dismissing it out of hand. This is a disservice and can cost you a huge sum of your proceeds.
The moral of this story is: make sure you are consulting with experienced and knowledgeable professionals for this special capital gains niche market. I have found that if all parties are on a conference call, the correct information can be discussed, and if there are conflicting opinions, everyone involved can produce the correct information from a qualified source and disburse it to all parties.
A professional team is crucial when implementing a capital gains tax strategy. Don't take the advice of someone who dismisses something out of hand without giving specific reasons to both you and the party recommending the strategy.
If you need brain surgery, you wouldn't go to a general practitioner would you?
ps. My brand new website I've been talking about went live today. Please check it out and let me know what you think.
Paula's new site
Paula Straub
http://www.Paula-Straub-Capital-Gains-Tax-Site.com
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