Eaton Accounting Service - Bookkeeping and Accounting

Over you head in Bookkeeping? Would you like to be accurate and up to date on your businesses financial condition including income and expenses? ? Eaton Accounting Service Bookkeeping and Accounting Free Discussion and Consultations 207-200-5337 ? -Weekly, Monthly, Quarterly and Yearly Bookkeeping and Accounting -Journal entries and recording business activity -Bank account reconciliations -Monthly Financial Statements - Income and Balance sheet -Preparation of reports for your Income Tax Preparer or CPA -Monitoring A/R, A/P and Payroll -Setting up your company in Quickbooks -and also general bookkeeping clean-ups ? ? Eaton Accounting Service 207-200-5337 ? BOOKKEEPING & ACCOUNTING www.eatonaccounting.com

Over you head in Bookkeeping? Would you like to be accurate and up to date on your businesses financial condition including income and expenses? Eaton Accounting Service Bookkeeping and Accounting Free Discussion and Consultations 207-200-5337 -Weekly, Monthly, Quarterly and Yearly Bookkeeping and Accounting -Journal entries and recording business activity -Bank account reconciliations -Monthly Financial Statements - Income and Balance sheet -Preparation of reports for your Income Tax Preparer or CPA -Monitoring A/R, A/P and Payroll -Setting up your company in Quickbooks -and also general bookkeeping clean-ups Eaton Accounting Service 207-200-5337 BOOKKEEPING & ACCOUNTING www.eatonaccounting.com

Year End is coming....

Over you head in Bookkeeping? Would you like to be accurate and up to date on your businesses financial condition including income and expenses? ? Eaton Accounting Service Bookkeeping and Accounting Free Discussion and Consultations 207-200-5337 ? -Weekly, Monthly, Quarterly and Yearly Bookkeeping and Accounting -Journal entries and recording business activity -Bank account reconciliations -Monthly Financial Statements - Income and Balance sheet -Preparation of reports for your Income Tax Preparer or CPA -Monitoring A/R, A/P and Payroll -Setting up your company in Quickbooks -and also general bookkeeping clean-ups ? ? Eaton Accounting Service 207-200-5337 ? BOOKKEEPING & ACCOUNTING www.eatonaccounting.com

When I used to prepare income tax returns and record the purchase of a new rental property on the Schedule E, I would have to find out which items are to be capitalized and which to be expensed from the items listed on the purchase and sale agreement. The general rule for capitalizing an asset is that the costs paid to purchase and bring an asset to the condition where it can be placed into service to earn revenue are capitalized, while other costs are expensed, and there are also many intricities and rules in between. Fortunately, the IRS gives a list of which items apply to real estate from the purchase and sales agreement, and they are found in Pub. 527. Real property. If you buy real property, such as a building and land, certain fees and other expenses you pay are part of your cost basis in the property. Real estate taxes. If you buy real property and agree to pay real estate taxes on it that were owed by the seller and the seller doesn’t reimburse you, the taxes you pay are treated as part of your basis in the property. You can’t deduct them as taxes paid. If you reimburse the seller for real estate taxes the seller paid for you, you can usually deduct that amount. Don’t include that amount in your basis in the property. Settlement fees and other costs. The following settlement fees and closing costs for buying the property are part of your basis in the property. Abstract fees. Charges for installing utility services. Legal fees. Recording fees. Surveys. Transfer taxes. Title insurance. Any amounts the seller owes that you agree to pay, such as back taxes or interest, recording or mortgage fees, charges for improvements or repairs, and sales commissions. ------------------------------------------------------------------------------------ The following are settlement fees and closing costs you can’t include in your basis in the property. Fire insurance premiums. Rent or other charges relating to occupancy of the property before closing. Charges connected with getting or refinancing a loan, such as: Points (discount points, loan origination fees), Loan assumption fees, Cost of a credit report, and Fees for an appraisal required by a lender. Also, don’t include amounts placed in escrow for the future payment of items such as taxes and insurance. ------------------------------------------------------------------------------------ Assumption of a mortgage. If you buy property and become liable for an existing mortgage on the property, your basis is the amount you pay for the property plus the amount remaining to be paid on the mortgage. Example. You buy a building for $60,000 cash and assume a mortgage of $240,000 on it. Your basis is $300,000. https://lnkd.in/eYk2HxX6

I used to have fun analyzing apartment buildings for potential purchase as an investment and potential business for myself previously. I read a few good books and studied multi unit investing and financial analysis and appraisal etc, and well as books on flipping, re-habs and etc. Later, I worked as a residential loan officer assistant while I was in college studying accounting. I also went to open houses and looked through listings to plug the numbers into a spreadsheet I created for analysis of a property according to several measures of profitability - Cash Flow, Return on Investement/Equity, Return from Depreciation (tax shelter), and Return from Appreciation. Basically though I only focus on cash flow and return on investment. I saw today a new listing for a 3 unit property in Portland and plugged it into my system with the supplied results, with expense estimates, and the property taxes and rental income for each unit as provided in the listing. The property is a 3 unit, with a listing price of $799,000, property taxes of $7,800 per year, and a listed rental rate or $1,637 per unit on the property listing found online. Portland Maine, and many cities in Maine now, are actually very expensive for these purchases. If you look at the somewhat detailed accompanying document I include the purchase with 10% down. if you look at the year 1 table and the table on the bottom of the page, you would have a negative 62% return, and be paying out of pocket around $40,000 per year cash to own this property.... In order to actually have a return (I plugged in the numbers) you would need to purchase with ~65% down which then is break even/zero profit, and then at 70% down, it turns a profit and is cash flow positive. The thing is, that means putting over $500,000 down! and beyond that, if you look at your return on the $500,000 you put down, you are making between less than 1% and 3% return. For me personally, that would be a horrible investment, but somehow, people must be buying these properties. I find these exercises to be informative, and you need a proper accounting of your financial transactions to perform them. In any case, as an apartment building owner, and if you are looking for a bookkeeper/accountant to record the transactions and provide financial statements for analysis and review, maybe I could help. I record transactions from bank statements, receipts and other documents including loan, insurance and purchase/sale documents, and provide financial statements for the owner's use for analysis, and which also can help them in filing their income tax returns (Schedule E) or give to their CPA for income tax preparation. I work with Quickbooks for accounting software and use Google docs for file transfers to and from clients making sharing documents quick and easy. Please see my website for more information. https://lnkd.in/eBaHQqN7

https://lnkd.in/eBaHQqN7

As a multi-unit residential rental property owner, if you have more than one property, there is a way to combine your properties on quickbooks for bookkeeping and accounting purposes. This helps if multiple properties are on the same LLC, or if you simply want to use one set of books instead of opening multiple sessions of quickbooks just to enter transactions into single properties. As well, you can see on a single statement how each property performs in comparison to the others. But, you could also use just a separate set of books for each property of course. It is important to have a set of books and to regularly record transactions and reconcile accounts, for both financial and income/expense analysis, as well as to easily file income tax returns such as on a Schedule E for rental properties. This information can be used by the owner(s) to analyze rental properties for cash flow, return on cash, return on equity and investment, letting you know whether this is a good investment or not, if income needs to be looked into, or if certain expenses are too high, and what they have been spent on. As well, as a property goes through the years, it's return on investment will decrease as it's cash flow rises, giving the opportunity to either 1031 exchange into another higher return property, refinance a loan, or keep the property as it is, if more cash flow is desired instead of growth. In any case, having an accountant regularly record transactions and provide financial statements and detail helps the property owner understand their building's profit and financial position. I have attached a simple example of a multi-property income statement I generated in quickbooks to see how it looks for three properties. If you own a residential rental property, or multiple properties and are looking for a accountant to record transactions, reconcile the bank accounts and provide financial statements, I may be able to help. I use quickbooks for accounting software, and google for file transfers, meaning clients and myself can add and receive files and documents through the online portal. Please see my website for more information.

Over you head in Bookkeeping? Would you like to be accurate and up to date on your businesses financial condition including income and expenses? Eaton Accounting Service Bookkeeping and Accounting Free Discussion and Consultations 207-200-5337 -Weekly, Monthly, Quarterly and Yearly Bookkeeping and Accounting -Journal entries and recording business activity -Bank account reconciliations -Monthly Financial Statements - Income and Balance sheet -Preparation of reports for your Income Tax Preparer or CPA -Monitoring A/R, A/P and Payroll -Setting up your company in Quickbooks -and also general bookkeeping clean-ups Eaton Accounting Service 207-200-5337 BOOKKEEPING & ACCOUNTING www.eatonaccounting.com