How does Quicken manage an investment property and does the information flow into a tax program?

trentqcken

I am looking at starting with Quicken mainly to manage a small investment property and properly report depreciation, expenses and revenues at tax time. Pretty simple situation, it's a small home I purchased in 2020 that I rent to 4 college students.

Frankx

Hi @trentqcken,

I have good news and bad news for you.  The good news is that Quicken has a version that handles the accounting for (and tax reporting related to) investment rental properties rather well - in my view.  The bad news is that it is only available in the Windows version at this time (and not currently available in the Mac version.  Theoretically, it would likely have been a good choice for your needs.

Let me know is you have any followups.

Frankx

Frankx

Just one minor point regarding the above comment - rental income and loss reporting in the US must be reported on Form 1040 - Schedule E (not Schedule C).

Frankx

jacobs

@Frankx  Thank you for the correction. I composed the note above thinking about using Quicken Mac for a small business from an unrelated thread yesterday, so I had Schedule C on my brain.  Quicken Mac also allows assignment of categories to 18 line items on Schedule E (and many other tax forms). 

jacobs

J_Mike said:

The OP mentioned Depreciation. No version of Quicken (Mac or Win) handles depreciation calculations. This is handled in the tax software and the info carries over from year-to-year.

When I was treasurer of a small national non-profit organization, I used Quicken Mac for the bookkeeping, which included a little depreciation of equipment. I did the same when I helped my wife keep the books for her small business. As you note, Quicken doesn't do anything automatically, but for limited depreciation tracking, it's do-able in Quicken Mac.

You can create an asset account for the property or equipment, and manually calculate and post depreciation expenses. (Depending how detailed you need the reporting to be, you can either do it in a single account showing the net book value of the asset, or do it the fully proper accounting way of having an accumulated depreciation account to which grows as the asset basis remains unchanged.) Again depending on what is being depreciated, either a spreadsheet or a readily-available website calculator can provide a schedule of depreciation expenses to enter monthly/quarterly/yearly. 

Frankx

Hi @trentqcken,

I have good news and bad news for you.  The good news is that Quicken has a version that handles the accounting for (and tax reporting related to) investment rental properties rather well - in my view.  The bad news is that it is only available in the Windows version at this time (and not currently available in the Mac version.  Theoretically, it would likely have been a good choice for your needs.

Let me know is you have any followups.

Frankx

trentqcken

Thanks that was very helpful.

jacobs

I would just add that for a simple single rental property like this, I would expect that to be easy to manage in Quicken Mac. The Mac version doesn't automate billing, but you could certainly track your rental income and your business expenses in Quicken Mac. You can do simple receivables tracking for rent that's owed. Quicken lets you assign business income and expense categories to about 30 line items for Schedule C tax reporting. 

Frankx

Just one minor point regarding the above comment - rental income and loss reporting in the US must be reported on Form 1040 - Schedule E (not Schedule C).

Frankx

jacobs

@Frankx  Thank you for the correction. I composed the note above thinking about using Quicken Mac for a small business from an unrelated thread yesterday, so I had Schedule C on my brain.  Quicken Mac also allows assignment of categories to 18 line items on Schedule E (and many other tax forms). 

J_Mike

QMac is capable of tracking rental income and expenses at an "elementary" level. The reports are somewhat crude but adequate for translating to tax prep software.

You create the income and expense categories and assign the appropriate Schedule E tax lines. Each property is assigned a Tag.

The OP mentioned Depreciation. No version of Quicken (Mac or Win) handles depreciation calculations. This is handled in the tax software and the info carries over from year-to-year.

I tracked two rental properties using QWin Delx (20+ yrs ago). The data is in my current QMac file and available for review, QWin has better, more flexible reporting capabilities but QWac appears to be adequate for tax prep purposes. If I was managing rental properties as a major business, I would probably be looking to use QWins' rental property software.

jacobs

J_Mike said:

The OP mentioned Depreciation. No version of Quicken (Mac or Win) handles depreciation calculations. This is handled in the tax software and the info carries over from year-to-year.

When I was treasurer of a small national non-profit organization, I used Quicken Mac for the bookkeeping, which included a little depreciation of equipment. I did the same when I helped my wife keep the books for her small business. As you note, Quicken doesn't do anything automatically, but for limited depreciation tracking, it's do-able in Quicken Mac.

You can create an asset account for the property or equipment, and manually calculate and post depreciation expenses. (Depending how detailed you need the reporting to be, you can either do it in a single account showing the net book value of the asset, or do it the fully proper accounting way of having an accumulated depreciation account to which grows as the asset basis remains unchanged.) Again depending on what is being depreciated, either a spreadsheet or a readily-available website calculator can provide a schedule of depreciation expenses to enter monthly/quarterly/yearly. 

trentqcken

Thanks for all your comments. Very helpful. Does Quicken allow me to track multiple businesses? As I mentioned I have a small rental property and I also have a small business where I resell packaged foods. The food business is very small as I only have a dozen sales transactions in the year.

trentqcken

The food business is just a side hobby, no employees, I don't carryover inventory year to year, no equipment. I really just want to track the sales and minor expenses.

jacobs

@trentqcken  You can track the business in several ways. You could create a separate Quicken data file for it if you wish. But you probably don't want to do that, since your funds are likely co-mingled with your personal checking or credit card accounts. Instead, you can use business categories, tied to Schedule C tax lines, in your main Quicken data file. You can also use Tags on transactions, if you need to track similar expenses across multiple business entities.