How to add 5 years of tax time reports in 5 minutes or less.
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Quickbooks Tax Time Tip: Add 5 Years of Tax Reports in 5 minutes or less
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Tenant Tracking is part 2 of the Investor Books Pro System™, The Only System for Real Estate Investors using QuickBooks Pro.
Here's a great 7 minute video giving you an overview of the Investor Books Pro System using QuickBooks Pro. This is the Investor Books Pro company file. Tenant Tracking is also included in your Investor Books Pro System. Tenant Tracking is your landlording and property management system.
Special Report - How Depreciation Benefits Business Owners
First of ALL: Do NOT Allow Yourself To Feel Bad about not knowing.
When I began my real estate business, I did not understand "depreciation" until I saw the huge benefits at tax time.
Then I really began to pay attention.
Depreciation: A non-cash expense that reduces the value of an asset as a result of wearand tear, age, or obsolescence. Most assets lose their value over time (in other words, they depreciate), and must be replaced once the end of their useful life is reached.
There are several accounting methods that are used in order to write off an asset'sdepreciation cost over the period of its useful life.
Because it is a non-cash expense, depreciation lowers the company's reported earnings while increasing free cash flow.
Simple Example:
Suppose a painter buys an extension ladder for $1,000.00 and let's assume the life of the ladder is 10 years. Although the painter is out $1,000 cash out of pocket right now in his purchase of the ladder, he can only “write off” $100 per year for 10 years because theladder has an expected life of 10 years. On top of this, the ladder will probably be worthZERO at the end of the 10 year period.
CHECK THIS OUT:
With real estate, we sort of get to do the same thing like the ladder.
We can NOT depreciate DIRT.
It lasts forever; however, the things built on the dirt, buildings and improvements have an expected life according to Uncle Sam.
RESIDENTIAL Real Estate improvements depreciate on a 27.5 year schedule.
COMMERCIAL is on a 39 year schedule.
What’s beautiful about real estate involves it usually holds it value and since we are at the bottom of the real estate market now, it will almost go UP IN VALUE again… and not down in value like the poor old painter’s ladder.
Example 1
• Contractor Buys $10,000 Gutter Machine
Life of Gutter Machine = 10 years (example)
Contractor does NOT get to write off 10k the year of his purchase.
Contractor gets to write off 1k for 10years.
the remaining 9k is carried on his books as an asset and gets reduced 1k each year until it reaches zero.
Example 2
Investor with 10 yr Rental bought for $80,000
You generally cannot deduct, in one year, the entire cost of property you purchased, either for use in your trade or business or to produce income, if the property has a useful life substantially beyond the tax year.
Instead, you can depreciate it. That is, you can spread the cost over a number of years, and deduct a part of the cost eachyear.
The kinds of property that you can depreciate include machinery, equipment, buildings, vehicles, and furniture.
You cannot claim depreciation on property held for personal purposes.
If you use property, such as a car, for both business or investment and personal purposes, only the business or investment use portionmay be depreciated.
You may depreciate property that meets all five of the following tests.
• It must be property you own.
• It must be used in a business or other income–producing activity.
• It must have a determinable useful life.
• It must be expected to last more than one year.
• It must not be excepted property. Excepted property (as described in Publication 946, How to Depreciate Property) includes certainintangible property, certain term interests, and property placed in service and disposed of in the same year.
To Your Continued Success!
Mike Butler
P.S. ALWAYS Check with your Tax Advisory and/or CPA before taking action.
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NOTES From Video
-------------------------------
80,000 dirt value is 5k
75k over Residential,..... 27.5 (25)
10 years..... Luke will give investor 150k this week for this house?
Fred Flintstone 3 Finger Depreciation Formula...
75k divided 25 yr = 3,000 year in depreciation
3k x 10 yrs = $30,000
-------------------------------->>>> 80k minus 30k deprection = 50k cost basis...
Sell for 150k ..... capital gain of 100k
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INVESTOR NIGHTMARE STORIES
------------------------------------
Yes, you can be creative and accelerate depreciation pretty darn fast.
do this only if you need it NOW and Yesterday...
500k year.. AGI....
if you got 30k in depreciation,.. yes, accelerating it would be good for short term benefit.
100 year AGI....
300k annual depreciation... WHY WOULD YOU ACCELERATE IT???
My Battle Plan is to always add to my cost basis to keep bumping.
I want Depreciation to outlive ME..
a lot of investors, veteran, they bitch and moan and complain of paying too much income tax..
paid for, FRESH OUT OF WHAT?.... depreciation...
============================================
When You Buy a Rental Property...
EVERYTHING YOU DO TO THIS PROPERTY BEFORE YOU PUT A TENANT IN IT
Becomes Part of the Cost of this investments...\\\
50k.. and do 16,000 in Capitalized Expense Account
... at the end of year, tx into asset account.
now your investment is 66k....
=
President Signs Repeal of Expanded 1099 Requirements
APRIL 14, 2011
On Thursday, President Barack Obama signed into law the Comprehensive 1099 Taxpayer Protection and Repayment of Exchange Subsidy Overpayments Act of 2011 (HR 4; 1099 Act), which repeals both the expanded Form 1099 information reporting requirements mandated by last year’s health care legislation and also the 1099 reporting requirements imposed on taxpayers who receive rental income enacted as part of last year’s Small Business Jobs Act (PL 111-240). The Senate approved the bill on April 5, and the House voted in favor of it on March 3.
Mike Grinnan, my CPA sent me this email..
On Demand Video Preview shows you how to run your real estate office from almost anywhere for free as long as you have internet access.
This is an ODV On Demand Video Preview
Not 1, Not 2, Not 3, But…
4 LIVE Training Online Workshops!
11am to 3pm eastern
8am to 12noon pacific
Saturday, January 15, 2011
Reg. $199 SAVE $160
ONLY $29
Work Shop #1
11am eastern / 8am pacific
QuickBooks PRO Basics 101
“POST OFFICE” Accounting Technique
Removing the Language Barrier with Accountants and CPAs
Understanding & Using the 4 Basic Account Types
MAGICAL Power of the “Cash From Me” Account
Understanding Equity Lines, Credit Cards
Why 2 Company Files
Multiple Locations and Cities
Work Shop #2
12noon eastern / 9am pacific
Investor Books PRO
How To Properly
Set Up Your Chart of Accounts
Enter Real Estate When Buying
Enter Selling Your Real Estate
Loan Money To Your Real Estate Business
Set Up Your “In House” Property Managment Company
Enter Refinances
Set Up MULTIPLE Entities
Using Your “Cash From Me” Account
Push Button Profit Power Reports & More Reports
Work Shop #3
1pm eastern / 10am pacific
Tenant Tracking & Loan Customer Tracking
How To Properly…
Enter A New Tenant
Automatic Billing Of Rent
Automatic Billing Of Loan Payments to You
Late Charges
Tenant Chargeable Repairs
Work Orders and Repair Request
Move In Process
Move Out Process
Rent Talk System
Collections
User Permissions
PROFIT Generating Reports and Reports!
Work Shop #4
2pm eastern / 11am pacific
Year End and New Year MUST Do’s
1098s and 1099s and the New Tax Law for Investors
Principal Reduction
Capitalized Expenses
Reports for Cash Flow, Taxable Income, and Profit
Training Your New Part Time or Full Time Staff
Reg. $199
SAVE $160
ONLY $29
QUESTION:
Hi Mike
I am the owner of your Investor Books PRO System software and have attended one of your seminars in KY a few years ago. I did have a girl doing my books who is no longer helping me and I am STUCK! I have a couple of questions that I can not seem to find the answer…
1. How do I get an accurate report on what I actually took in on a property? I can go to income by property report – and thats fine – but when I compare that to my the income detail report – the numbers dont match? What I billed out isnt important – it is what I actually took in (by property) that I am looking for?
2 Once I can get my hands on the real amount of money I took in for each property – how do I take that income and put it into Investor books so that I can see what my real bottom line is – ie income vs expenses…
I would appreciate it if you could point me in the right direction….
Thank you
Sharon B.
Mike’s Answer:
Don’t feel alone on this Sharon. Many investors have tried to simply "delegate" to another without having a good understanding of the basic fundamentals. As investors, we all have the huge handicap of being impulsive and wanting results now.
When training investors across the nation, you would be very surprised at how few investors actually read "instructions." (me included).
Let’s start from the beginning, in reviewing your file, it appears Susan was the person in charge of your Investor Books Pro System with Tenant Tracking.
Based on your question and email here, I am going to assume she tried to do everything in Tenant Tracking.
If this is the case, You can not produce any reports in Investor Books Pro.
When using Investor Books Pro System properly, Tenant Tracking is your property management and loan customer tracking system. The end result from Tenant Tracking is a "Stamped Deposit Slip" from your bank.
At that time, you will enter your "already deposited into your bank account" deposit into Investor Books Pro company.
This allows for True Blue Cash Method of Accounting reporting income "as you receive it" and not as "they owe me."
Take a Look at the "Why 2 Company Files ODV" and this should clear it up.
Sharon, if you have been using Investor Books and Tenant Tracking properly, you will simply click on your Reports Speed Button in Investor Books and you can select the reports for the year you want to see your results.
Good Luck in 2011
Let me know if this has helped you out..
Mike Butler
QUESTION:
Hi Mike,
Happy New Year. I hope you are doing better than I am at this time. My wife’s computer crashed. We received a new hard drive from Dell. Now we must install all our programs and retrieve our backup data. We thought it would be easy as we have our data backed up to an external drive and offsite with Carbonite but getting the programs reinstalled and set up properly is another matter.
Our IT support person will be installing our software tomorrow morning and we really need to get back in business at that time. We really rely on Investor Books and Tenant Tracking and cannot afford to be without them any longer.
I have two CDs and hope they will get us back in business. The jacket for the Investor Books CD says we need a key code and I am assuming that we probably need one for Tenant Tracking but we do not have the original jacket. The only numbers I could locate are in the center of the CDs. They are as follows:
Investor Books XXX copyright date 2004
Tenant Tracking XXX copyright date 2003
Are these the key codes? If not what can I do? Is someone available by phone or email for help if we run into install problems? Is there any information you can give me that will help in the reinstall?
I know it is New Years eve and day but until this happened I did not realize how much we rely on your programs or how we survived before having them.
Thanks for your help,
Richard W.
———————————————–
ANSWER:
Here;s Your Answer Richard…
First of all, Happy New Year and calm down… not a problem, just a situation….
Simple Solution:
Rule #1: Always Make Back Ups… Looks like you did this wonderfully on Carbonite.
Rule #2: You Must Members Click Here to Access Full Video/Article
Thursday, February 23, 1:51 am
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