Rehab- Business Accounting Questions

[David Robertson]

I am currently looking for my first rehab project and had some questions on the accounting process. I am assuming that I will need to track the amount of money used for the repairs, holding costs, realtor fees, etc in order to calculate profit for tax purposes.

What accounting software/practices do you use to track this information?

Should I establish an LLC and a business bank account to better track the transactions of ingoing/outgoing transactions?

[J Scott]

QuickBooks (or at least Quicken) is a good choice for maintaining the books.

As for business entity, it's always a good idea to protect your assets and minimize taxes -- talk to a CPA for your best choice of entity.

And definitely have a separate bank account for all business transactions. Don't mix personal and business funds -- it makes accounting more difficult and impact the protection you get from having an entity.