Investor · Madison, WI · Member since 2012 · 242 posts · 61 votes
It's my understanding that every asset needs to be assigned to a property, we have 7 rental properties, and buy things like a snowblower that we use at two multi-family properties. Do we split the depreciation and asset between these two properties? Or should it be assigned to a single one (for accounting and tax purposes). I can easily do it in quickbooks, but how does it work when tax season comes?
Retired Landlord/Author · Commerce Township, MI · Member since 2012 · 1k+ posts · 1k+ votes
9y
Assign it to an Office Expense.
A lot of people don't think of creating an Office Expense as a Class in the class feature of QuickBooks. (The class feature is used for many things. You can put anything you want into the class feature in order to see exactly what you spend per year on this particular item. Anything that doesn't belong to a specific property is considered an Office Expense.
When you write a check or use your business charge card for business purposes, you will link it to an OFFICE EXPENSE Account in your Chart of Accounts, and link it to your Office Expenses in your Class Column of the check. UNLESS, that charge is actually related to your property. Then it would be linked to that particular property. But a snowblower will be used for every place. Even you office driveway.
Now you can run a Profit and Loss Report by Class to see exactly what you spent your money on in regards to Office Expenses (Business Expenses) It just doesn't get any better than that.
FOOT NOTE: It will be listed as a Fixed Asset, because it is a big item. You will depreciate it each year. I don't know what the going percentage rate is right now so ask your Accountant.