Archive for 'Tax Time'

Where to Enter Your Equity and Proper Use of CASH from Me

  • with a dose of Crazy Advice from an Incompetent CPA

 

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.

From Mike

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How to add 5 years of tax time reports in 5 minutes or less.

QuickBooksForInvestors.com

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QUESTION:

Hello Mike,

I understand your reply of repair versus capital expense so my question must not have been clear...

When I buy a house to resell that will need some repairs, these repairs are a capital expense as the property is not in "service".

To properly see my cashflow in Investor Books PRO when I do a report, I put these fixup costs as an expense (initially).   I do this under "repairs and maintenance"

The fixups will eventually be transfered and recharacterized as a capital expense at a later date thus in the meantime allowing my cashflow report to provide useful information for me as an investor.

My question is when do I transfer this to the asset?

Thank you Mike,

Hope that is more clearer-er

Steve

 

ANSWER:

Great Question Steve! This is probably one of those questions most investors are afraid to ask.

For starters, as an investor and business owner, YOU MUST KEEP YOUR FINGER ON THE PULSE OF YOUR BUSINESS! - No Exceptions! No longer can you borrow your way out of a cash flow problem.

Knowing this up front, you MUST be able to push a button and see a real, true blue, "cash flow" report.

This "Cash Flow" report drives many bookkeepers, accountants, and CPAs BONKERS because they have been trained to keep your books in Ready For Tax Time fashion. Their professionally trained method makes it totally impossible to generate a true "Cash Flow Report."

Keep in mind, the way they do your books is proper for tax time; however, you and I have not been trained in their 5 star bean counting arena.

The simple version is Investor Books PRO makes it simple and easy for investors and business owners.

ALL of your capitalized "expenses" get entered using the

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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..

 

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Question: Hello Mike, 

Would you please give me some guidance.

 

To make sure I am of the correct mindset in reading the Investorbooks manual ... on page 86 you mention if we are using single member LLC's (which are a pass through entity as fax as the tax prep) we set them up on one set of Books ... then does that mean that if we are not using single member LLC's and instead have a Corp that files its own return and a Multi-member LLC(s) that files its own 1065 that these will each have their own set of Investorbooks?

And ... if the Corp is on a fiscal year versus Calendar year end for taxes, does that make a difference as the way we would log the Fixed assets may be better using Fiscal Year versus Calendar year which may cause havoc with the other entities.

Thank you Mike, 

Steve
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ANSWER: 

Great question Steve.. Don't  make it so complicated. QuickBooks is a very powerful program allowing you to slice, dice, thrash, and smash your numbers.... providing you have it set up properly and use it properly as well.

You are making it way too complicated Steve. Let's dumb it down. here are your simple Rule Of Thumbs to keep you on the right path and It Is ALL DONE In Investor Books Pro... ONE Company File for ALL of Your Real Estate Entities and Businesses. If You have multiple entities

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 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

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