Category for Rental Property or Business Office mortgage?

LivTheDream

I don't see a Rental Property or Business expense category for mortgage payments. I see Mortgage Interest but not for the principle. I can't add (assume I shouldn't) a Rental or Business category - hard coded to Personal.

How is everyone handling non-personal mortgage payments? Use Home:Mortgage and category for the property ??? Seems that would mess up tax reporting.


Liv

Mark1104

principle is not an expense.....only the interest component of hte payment is an expense

presumably you have a liability account indicating the loan balance. The principle portion of the payment reduces this liability account as payments are made

Frankx

Hi @LivTheDream,

Yes, there is not an "expense" categories for the principal portion of mortgage payments (both in Quicken Home & Business or in any other Quicken version).  That is because the principal portions of mortgage payments are not "expenses", rather they reduce loan balances (either personal mortgage loans, or business/rental property mortgage loans).

And, since the principal portions of any mortgage payments (personal or business/rental property related) are not "expenses" there is no threat of "mess[ing] up tax reporting.  So most folks are posting principal payments on loans to the respective loan liability accounts (which thereby reduce the mortgage loan liability/balance).

I know these matters can be confusing, so please let me know if you have any follow-up questions.

NotACPA

The "expense" was when you bought the property and took out the mortgage to pay for it.  If your principal payments were ALSO counted as expenses, you'd be double-counting the cost/expense of the property.

BUT, since I really suspect that you really want to see where your money is going (and coming from) use a Cash Flow report ... which will include the principal payment as "money out".

Mark1104

principle is not an expense.....only the interest component of hte payment is an expense

presumably you have a liability account indicating the loan balance. The principle portion of the payment reduces this liability account as payments are made

Frankx

Hi @LivTheDream,

Yes, there is not an "expense" categories for the principal portion of mortgage payments (both in Quicken Home & Business or in any other Quicken version).  That is because the principal portions of mortgage payments are not "expenses", rather they reduce loan balances (either personal mortgage loans, or business/rental property mortgage loans).

And, since the principal portions of any mortgage payments (personal or business/rental property related) are not "expenses" there is no threat of "mess[ing] up tax reporting.  So most folks are posting principal payments on loans to the respective loan liability accounts (which thereby reduce the mortgage loan liability/balance).

I know these matters can be confusing, so please let me know if you have any follow-up questions.

NotACPA

The "expense" was when you bought the property and took out the mortgage to pay for it.  If your principal payments were ALSO counted as expenses, you'd be double-counting the cost/expense of the property.

BUT, since I really suspect that you really want to see where your money is going (and coming from) use a Cash Flow report ... which will include the principal payment as "money out".

LivTheDream

@Frankx @NotACPA @Mark Steinman

Thanks for all your responses!