Closing Settlement Sheet

Question

This might get tricky so bare with me. I buy properties with seller financing. So happens this time around with how the timing came out, the closing settlement sheet (ALTA) based on closing costs, the seller bringing the prorated rent + security deposit subtracted from me paying the seller the prorated mortgage payment based on our agreed time frame (AKA pre-paid interest) I am actually walking away from the closing table with a small check under $100.

Question: How in the world do I show a record of all the closing costs that I paid for, the tenants security deposit that I got "not really", the prepaid interest, etc etc etc when I actually walked away from the closing table with a few bucks?

NotACPA · Answer

I don't quite understand.  Why would the ALTA sheet have a transaction that doesn't actually exist?Please elaborate.

Ahmed · Answer

Sounds good. I am concerned that when I enter a transaction that says $xx.xx transferred from the business account to the whatever appropriate account, there  isn't actually any BANKING transactions that would reflect that. As far as banking feed is concerned, no such even will ever show up.

NotACPA · Answer

Review that ALTA closing sheet line by line.Some lines add to your basis in the property ... they should be recorded as transfers to the property accountSome are your loan from the seller.  Record these as a transfer to the Loan account (which will establish it's starting value)Some are pre-paid interest, use a Category which reflects this.Some might be pre-paid escrow items.  Transfer these to an Escrow account that you've created.
Some lines are just plain expenses.  Decide which Expense category you want to use (or create) for these.