All Forum Posts by: Dan V.

@Nicholas Aiola

I hope you are doing well. I have some tax questions and I really appreciate you sharing your knowledge. I am making my own version of rental property calculator and I am trying to add calculation on net income and net cash flow after tax, to present to an owner financing deal. I did my research but I wanted to confirm with the expert.

1. Capital gain is subject to tax rate of 0%, 15% or 20%?

2. Passive income tax rate is 20%?

3. Depreciation recapture is subject to 25%?

4. Interest income (owner financing) is subject to ordinary income tax rate?

5. Taxable capital gain on installment payment is equal to Principal portion of loan payment / Sales Price x Total Capital Gain?

Anything else, that I should consider in the calculation? Thank you in advance!

@Mark Smith If you are only looking to integrate and sync calendars, Airbnb, VRBO and Booking.com have this feature which you can also connect to your Google Calendar. The synchronization is not real-time though, not sure, but it looks like it updates every 30 minutes or so, so double-booking may happen. 

If you are using a property manager, you should set up a trust "bank" account and call it "PM Clearing Account", then treat the PM transactions as if it's a bank account. Once the money is received you will do transfer from the clearing to the checking account. Preferably, you should enter each transaction in the PM Clearing register for more granularity or you can book a single entry to capture the entire transactions for the month. 

@Justin Farman Quickbooks is pretty popular here too, Quickbooks Desktop Pro or QBO Plus will work in tracking multiple properties by setting up each property as a Class. Since you already have it, I recommend giving it a try also for your real estate business, it can be customized to fit your business needs.

I'm having trouble tagging people but for 1031 topic Dave Foster is one of the top contributor here for that area. Search up his name and you'll learn a lot from his posts. 

Reach out to few folks here. Some may provide QBO setup and coaching services. Most people here will agree that having help from a professional to set up your accounting system and procedures is a great investment. If you decide to hire somewhere, make sure that they are familiar with the industry. 

@Jared Baker It is the best practice to have a separate and exclusive bank account for your rental property. All rents and expenses should go thru this account and not commingled with personal transactions. Some states require a separate account for security deposit so you should look at that too to see if you need more than one bank account. If you plan on using credit cards, have a separate and exclusive credit card account as well for the rental property. 

Software or excel will both work since it's only one property. You just need to establish a proper system to track everything for the rental property so it will be easier comes tax season and also if in case you wanted to analyze how your property is performing. 

Congratulations and good luck!

Price is what you pay, value is what you get. The price depends on them but the value depends on you. Set your needs and expectations and figure out how much you're willing to pay for it. Accounting is the language of business, so in every business, accountant is a must in order to grow. There's more use to an accountant other than preparing taxes, you know. 

If you think you're not getting your money's worth, then you may want to consider other professionals that will give you the value you're looking for, but again you need to know your needs and expectations. I wish you the best!

@Mark B. Two main suggestions here that could work either way. 

1. Book a journal entry for the transactions for the month (you should know double entry accounting). Use this if you trust your PM enough, and it's easier, less details though.

2. Create a clearing account, treat the PM as if it's a bank account. Enter the transactions line by line and reconcile at the end of the month. 

As an accountant, I personally prefer the 2nd option since it will allow you to drill thru the details, and do full accountability on your PM. 

@Heather Miner If the tenants are paying via QBO platform, setting up different due dates for other tenants may not be a problem. Not sure if you are aware, but Late Fees feature in QBO is currently being rolled out. You can find it under Settings>Sales. This feature is still in beta though and may not be available to all QBO accounts. Check it out and let us know how it works out.