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Barney
Joined: 19 Aug 2005
Posts: 129
Location: California
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| Posted: Tue Aug 19, 2008 3:50 pm Post subject: Messy Stuff |
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I have a client that has tax prep company.
He also has rental property.
He has asked me to show a deduction in the tax prep company income of $32,000 and put it into a second company (rental property) as income.
I'm not sure how the monies had gotten deposited into the tax prep company.
Do I show the JE in the tax compay as a CR to what?
and DR Tax Prep Income.
Then make a JE into the rental property as a CR to Rental Prop Income and a DR to what?
Any help with this would be greatly appreciated.
Thank you |
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stasia2003
Joined: 25 Feb 2008
Posts: 199
Location: FL
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| Posted: Tue Aug 19, 2008 6:24 pm Post subject: Re: Messy Stuff |
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Barney wrote: I have a client that has tax prep company.
He also has rental property.
He has asked me to show a deduction in the tax prep company income of $32,000 and put it into a second company (rental property) as income.
I'm not sure how the monies had gotten deposited into the tax prep company.
Do I show the JE in the tax compay as a CR to what?
and DR Tax Prep Income.
Then make a JE into the rental property as a CR to Rental Prop Income and a DR to what?
Any help with this would be greatly appreciated.
Thank you
Is he telling you to put that or is that how the numbers come out to be? You need to make sure he doesn't have you doing something illegal. Businesses are required to not fudge the numbers in their businesses. Or is he asking you to do like a owner's draw from one company and using it as owner's contribution in the other?
If that $32,000 is not from actual transactions in the company, then you don't need to do it. Remember Enron and Worldcom? Just say no. :shock: |
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Barney
Joined: 19 Aug 2005
Posts: 129
Location: California
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| Posted: Wed Aug 20, 2008 6:45 am Post subject: |
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Thank you stasia2003,
I am going to talk to him about it.
I know that the tax prep income is taken directly off the bank statement
and posted directly to tax service income. No invoices to match up the amounts to.
Could be that he is having the rental property deposited directly into the tax prep company. Why, I don't know.
If that is the case, I will post as an owner's draw and contribution from owner.
Thank you for helping with this. |
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stasia2003
Joined: 25 Feb 2008
Posts: 199
Location: FL
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| Posted: Wed Aug 20, 2008 7:08 am Post subject: |
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Barney wrote: Thank you stasia2003,
I am going to talk to him about it.
I know that the tax prep income is taken directly off the bank statement
and posted directly to tax service income. No invoices to match up the amounts to.
Could be that he is having the rental property deposited directly into the tax prep company. Why, I don't know.
If that is the case, I will post as an owner's draw and contribution from owner.
Thank you for helping with this.
One more question though because it could make a difference on how things are reported.
Is this a sole proprietorship/partnership or a corporation? If it's an S or C Corp, then you can't call it an owner's draw. You gotta be careful with the comingling/misappropriation of funds here. Money received as revenue from a company, must be placed on that company's books.
Talk to him and get as much info as possible and then come back and chat with us. :D |
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Ahshucks
Joined: 22 May 2008
Posts: 50
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| Posted: Tue Aug 26, 2008 9:59 am Post subject: |
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| You can set up an owner's liability account in the current debt section. |
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