This article outlines how to add your property fixed assets and basis to REI Hub for properties purchased before the current accounting period (prior to your bookkeeping start date).
For properties purchased in the current accounting period (after your bookkeeping start date), click here.
Adding your property's fixed assets and basis will allow the property to be reflected correctly on your Fixed Asset Schedule and Balance Sheet. If you are working with a tax preparer or financial professional helping you manage your fixed assets and depreciation, this may be an optional step from a tax preparation standpoint. However, it is essential if you want your REI Hub books to reflect both the operational (revenues and expenses) and the capital (fixed assets and depreciation) parts of your business.
Properties purchased before the current reporting period are handled differently than those purchased in the current period. Since the purchase occurred before your most recent tax filing, the initial basis of the property has been set, some depreciation has been claimed, and any deductible expenses have already been accounted for. Therefore, rather than calculating the home's basis from the closing disclosure you just need to enter the existing balances in your key fixed asset accounts.
Key Fixed Asset Accounts include:
Buildings as the depreciable basis
Land as the non-depreciable basis
Accumulated deprecation is the amount of depreciation that's been taken up to this point
To Enter a Property Basis
1) Find or determine your key fixed asset account balances
These values will be entered as opening balances into REI Hub, dated the day before the current accounting period begins. You will need the closing balances of each account as of the same day.
For example, if your REI Hub bookkeeping start date is 01/01/2024, you will enter the opening balance on 12/31/2023.
If you have been tracking your fixed assets in another accounting system, use the closing balances for the same day (ex., 12/31/2023).
If your CPA or tax preparer has been tracking these numbers on your behalf, you can ask them for the balances.
2) Add a fixed asset for the property
Follow this article on creating a new fixed asset. When following the fixed asset prompts, make sure to choose:
'A Property' as the asset type
The correct property from the options
Residential or Commercial for the appropriate useable life
Creating the fixed asset defines its characteristics. The next step is adding transactions to populate the fixed asset values.
3) Enter the values into the fixed asset
Open the fixed asset you just created. Click Add Transaction in the upper right corner and select Opening Balance.
If you have a bookkeeping start date set, the Opening Balance transaction defaults to the day before your current accounting period. When inside a property fixed asset, it will also pre-select the key fixed asset accounts discussed above. Enter your balances for each account, and enter Accumulated Depreciation as a negative.
4) View the fixed asset reports
Your new property fixed asset will now show on the Fixed Asset Schedule. The fixed asset values will also be reflected on the Balance Sheet report.
Still have questions? Reach out to our Support Team via email at [email protected] or call us at (888)939-6865.