Tax Guru – Ker$tetter Letter

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Operating wih no accounting knowledge…

Posted by taxguru on March 22, 2008

Q:

Subject:  Transfers from personal checking into a business shown as income ???

Kerry

I read your tips on Taxguru.org

I have quicken 2008

I have a business in florida selling equipment.  I get paid a salary.

I also have a farm in Tennessee which a rent out  

the problem is every month the farm loses money.
I ever overdraft or pull money from a line of credit or my checking account

This shows as income in cash flow reports.

how can the transfer go from my checking account >  to the “Shareholder Loans.” to the farm,  and if its not income or expeses
what is it   (a liability)?

I guess thats what gets it off the the income statement

If (should) the farm should have its own Quicken file

How does the income flow in and out of my personal checking into the farm when it needs money?

Sorry for the conveluted questions?

Thanks

 

A:

All of those questions involve very basic bookkeeping procedures.

You are way out of your depth in trying to set up and keep your own books without professional guidance.  You should have a professional bookkeeper set up the Quicken, or better still QuickBooks, files to coincide with each of your tax returns and then either train you how to make the entries for your transactions or take on that task on an ongoing basis.

Your personal professional tax preparer should also be involved in the design of your books to ensure the ability to easily obtain the info s/he needs for each of the related tax returns.

Good luck.

Kerry Kerstetter

 

 

 

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