Entering Mortgage Closing Costs for Depreciation

[Mike or Penny Novack]

Tim7621 wrote:

>Hello,
>
>I have created a GnuCash account for a commercial rental property held in a
>LLC.
>Here are the numbers (rounded for simplicity):
>The building purchase price: $163,000. 
>Loan amount: $136,500
>Money brought to closing: $34,000(26,500 down payment, 500 prop. taxes,
>7,000 closing cost [that must be added to the basis and amortized])
>
>Under Equity, I created an account to show money brought to closing
>($34,000)
>Under Assets, I created an account 'Building' to show building value -
>$163,000
>Under Liabilities, I created an account to show the loan amount - $136,500
>
>My questions:
>1. Where do I enter the closing costs (presently, I have it shown under
>Liabilities, in an account to show the closing costs - $7,000, but I'm not
>sure if this is correct)
>
>Next question is concerning depreciation:
>I found the following example of how to depreciate office equipment:
>  
>
..... STOP  Your immediate problem isn't "how do I do this using 
gnucash?" but "what do I need to do to for the accounting of a rental 
property held by a LLC?" What accounts will I need, what will the 
transactions be like, etc. whether I'm doing this using some software 
like gnucash, some other software, using spreadsheets lined as if 
accounting paper, or even the old fashioned way pen and ink on paper. 
Get yourself a couple basic accounting books. You'll want one covering 
"accounting for rental property" and one "accounting for a LLC". And 
you'll want ones relevant to the rules of the jurisdiction you are 
under. That's if you plan to be doing this on your own without an 
accountant.

Michael D Novack