QUESTION from Kyle:
My S-Corp is debt capitalized with a 50K loan. I've spent some on business expenses etc. My s corp now owes the loan money. Also, in my loan agreement, I pay the loan 25% of my NET profits from each rehab I sell. I big percentage, but it's a family loan. Gotta help the fam!!
What would be your best method to set this up in Investor Books to keep track of the loan and money I spend against it and therefore owe it. And also to keep track and divvy up my net profits after selling each rehab? A video or written reply would be greatly appreciated.
Thank You Mike
Kyle
Please log in to view more of this post
keep it simple Kyle.
After entering the closing statement when you sold it.
You can run a report and see your dollar amount of real profit.
in your case, you say 25% is $7500 is the “fee” for the loan, or is it a partnership?
this makes a huge difference.
Mike
Thanks. Makes sense. Now how about when I distribute the 25% after each property sale.
Let’s say I make $30k on a rehab sale. I owe 25% to my Loan (liability account). So I need to move $7,500 over to my loan account.
To make it look clean for taxes and for Investor books to account for it correctly, do I just record the whole $30,000 into my entity account and then make a “deposit” from there into the loan account for the $7,500? Or is there a better way? Thanks.