Using GNUCash for commercial property held by LLC - Some newbie questions

replicon replicon at gmail.com
Sun Sep 25 23:44:49 EDT 2016


Hello everyone,

I'm part-owner of a commercial property, held by an LLC we've created, and I
just started learning about GNUCash. I went through the guide and have a
good general idea of how to set it up, but I have some specific questions I
hope someone can entertain.

I'm working with an accountant, but want to set up a reasonable first swag
of what we've got going to send him, to seed our discussion.

1) How do I account for things I've had to pay for _before_ our business
checking account was available? This includes setting up insurance, and some
parts of the downpayment that weren't handled by the loan. I'd think of them
as expenses. They were 'personally' paid for (from my personal checking
account, which will NOT be part of this separate gnucash file), so to
properly show where the business is, it would have to reflect that it's in
the negative. Question is, what account should I create for the double-entry
part? It's almost like I need a dummy account to hold that negative balance.

In this thread:
https://lists.gnucash.org/pipermail/gnucash-user/2013-November/051527.html
Someone said closing costs should be listed as an asset, but... shouldn't
that be an expense? It's like... a service I paid for, isn't it?

2) How do I account for the case where I need to personally put a bunch of
money into our business checking account to be able to afford a large
expense? Again, _personal_ checking account doesn't belong in this gnucash
file. If I look at the bank statement for our business checking account, it
looks like a large credit, followed by an equivalent debit, but in _real
life_, it would have to be represented as a net negative.

3) I'm trying to come up with a good starting account setup. The hard part
is figuring out what goes where, given how we did the purchase:

* Assets
    * Business checking account: Actual checking account we have (created as
part of closing)
    * Building: This would be the _APPRAISED_ value (not purchase sale
agreement amount), and depreciation adjustments over time.
* Liabilities
    * Loan: Opens with with the loan amount; principal portion of mortgage
payment starts balancing it.
* Expenses
    * Acquisition Costs: Payments made as part of the purchase price (beyond
loan amount)
    * Interest: Interest portion of mortgage payments gets split into here
    * Operating Expenses: separate category, useful for calculating
operational costs for triple-net leases
        * Insurance: self-explanatory
        * Property Tax: self-explanatory
        * (and other misc stuff we pay for)
* Income
    * Rent: Rental income
* Equity
    * Opening Balances: (all opening balances from above accounts)


Does this make sense?

Some context: The full price we paid for the building was (loan amount) +
(paying backlogged taxes) + (rent credit for old owner who is a tenant).



Thanks! I know this is a bunch of stuff, but I hope someone passionate about
GNUCash will take the time to help a friend out! :-)

cheers



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