Quickbooks Desktop Pro: how to account for starting capital?

[Michael Chizhov]

Hey all, just bought my first house-hack, has the potential to be a 3-unit after renovation. I'm trying to get my books started on the right foot and while I have a pretty good understanding of how to set up my Chart of Accounts and get things categorized, I'm a bit confused as to how I account for the initial cash that I used to purchase the property and pay for the renovations.

I opened a new bank account, sold some other investments, and transferred the proceeds of those sales into the new bank account. All of my real estate expenses have been coming out of this new account. So, would I classify that initial cash as "Owner's Equity?" Or something else? If it's equity, how does this account decrease in amount? Through rental net profit I pay myself? I'll be working with a CPA towards the end of the year to make sure my taxes will be all sorted, but I'd like to get things all set up as well as I can now to make it easier later on.

Would appreciate any help in how to categorize/deal with the initial cash to purchase/remodel in Quickbooks Desktop Pro. Thank you!

[Natalie Kolodij]

All of your initial renovations and such to get the home in rental condition will be added to the home's basis. 

So in this case it's a house hack I'm assuming which will make it weird. But assuming all 3 units are rental. 

You'll need to figure out depreciable basis of building vs. land 

You'll set up building (including totals as a depreciable asset) and land as a non depreciable asset and the other side to that journal entry will be an increase to a loan if there is one, or it's capital contributions/equity.