QUESTION from Cassandra:
Hi Mike,
I'm really enjoying your QuickBooksForInvestors system!!
Here's my question....
I have heard you say you don't bother with the Owner Equity account cause you let your CPA deal with that.
You say you use the "Cash from ME" (Long Term Liability) account when you infuse money into your business.
For short term interest-free loans to my business, this concept makes sense to me. But, if I infuse money to buy a property, I believe my CPA will complain because this Long Term Liability has no terms such as interest rate and loan period.
I'm also reading the IRS can easily challenge this and force me to treat it as equity.
My LLC expects to pay this infusion back once I sell the property several years down the road. So, how do I justify using a Long Term Liability account when there are no loan terms?
Also, how do I explain this showing up on the balance sheet as a long term liability when it is not a loan with terms?
Thank you,
Cassandra