What is the difference between a Business account and Rental account?

LivTheDream

I've just begun using H&B (Windows) and cannot see a distinction between identifying a bank account as business or rental - everything looks the same. I am managing a couple of different rental property businesses so would like to make sure I set it up using the best type of account possible.

Frankx

Hi @LivTheDream,

In Quicken, the "business module" is separate and distinct from the "rental property" module and you may have noticed that the rental property module is very specific to that activity, while the business module is a little more generic - so it can be easily used for almost any type of small business. 

A business bank account, on the other hand can be used for any type of business.  So, if you plan to use the rental property module I would suggest that you setup the bank account in that tab, or if you use the business module, setup the bank account there.

Get back to me if you have any followups.

Frankx

NotACPA

Q determines whether any give transaction is personal, business, or rental by way of the TAX LINE that's associated with the CATEGORY.

• If the category has a Schedule C tax line, it's business.
• If the category has a Schedule E tax line, it's rental
• If the category has a different, or no, tax line, it's personal.

What bank account you use for the transaction doesn't matter.  Only the category (or a tag with an appropriate tax line associated).

Frankx

Hi @LivTheDream,

In general, an expense (in this case the well-earned fee for your taxes) that covers more than one business activity/endeavor should be split between the respective entities.  In this case, the fee would not need to be split between the real estate properties for tax return purposes, because your income or loss from all real estate activities is combined on your tax return.  However, if you want to be able to see the profitability of each property, you should allocate it among the properties in Quicken.

Frankx

Frankx

Hi @LivTheDream,

In Quicken, the "business module" is separate and distinct from the "rental property" module and you may have noticed that the rental property module is very specific to that activity, while the business module is a little more generic - so it can be easily used for almost any type of small business. 

A business bank account, on the other hand can be used for any type of business.  So, if you plan to use the rental property module I would suggest that you setup the bank account in that tab, or if you use the business module, setup the bank account there.

Get back to me if you have any followups.

Frankx

NotACPA

Q determines whether any give transaction is personal, business, or rental by way of the TAX LINE that's associated with the CATEGORY.

• If the category has a Schedule C tax line, it's business.
• If the category has a Schedule E tax line, it's rental
• If the category has a different, or no, tax line, it's personal.

What bank account you use for the transaction doesn't matter.  Only the category (or a tag with an appropriate tax line associated).

LivTheDream

@Frankx

That's more info than I've gotten from talking to Q support so THANK YOU!! MI will have to look at the 2 different accounts more closely .. they both looked the same to me.

Thanks again for your help!

Liv

LivTheDream

@NotACPA

Thanks for the info .. so if I have tax prep fee from CPA, it comes through as a Prof and Legal fee (Business Expense) but that fee is split between the properties, do I change the tag to Legal and Professional (Rental Expense) or leave it as the business expense tag even though it's split across the properties?

Frankx

Hi @LivTheDream,

In general, an expense (in this case the well-earned fee for your taxes) that covers more than one business activity/endeavor should be split between the respective entities.  In this case, the fee would not need to be split between the real estate properties for tax return purposes, because your income or loss from all real estate activities is combined on your tax return.  However, if you want to be able to see the profitability of each property, you should allocate it among the properties in Quicken.

Frankx

NotACPA

@LivTheDream,

I'd be inclined to record the entire fee in the account from which you paid it ... and then SPLITTING the transaction to allocate some portion to a Sched C category and some to a Sched E tax category.

You might ask the CPA what the split might be, OR you might split it equally between business and Rental (and then further split by property) OR you might split it proportionally dependent upon the percent of income from each activity.

Those are only possible suggestions.  There are probably others.