Logging a Refinance in Quickbooks Online

[Pavlos Kasselouris]

Hi everyone!

I recently had a bookkeeper from India, setup QBO for my 4 rentals. Properties are under a LLC with a partner and we have bought, made capital improvements, cash out refinanced. I feel things got a little too complicated for the virtual assistant. Overall he did a good job, so I dont complain.

My question is how do you log a cash out refinance on a property like the one I referenced.

I had him log under the property, the actual cost (split land-building),  capital improvements(which includes closing costs from cashout refi), accumulated depreciation, loan costs that gets amortised over the life of the loan, and setup an escrow account that all the prepaid taxes and insurance went. 

Of course under the long term liabilities went the actual mortgage.

What I don't understand is under what account does the actual cash go to, since its not a taxable event?

[Brett Sorenson]

In the end what actually happens in a cash out refi?

Your cash position increases with a debit to cash representing the cash received and shown on your bank statement and an offsetting credit to the mortgage liability.

Just because there is cash movement doesn't mean it's a taxable event. This portion of the transaction shouldn't hit your income statement which is what I would assume you are looking at regarding your overall taxable income.