If you are using QuickBooks for managing your real estate business, you may be wondering how to handle closing statements. Take a peek at a question one of our clients recently asked about closing statements and get some tips on the topic from our response.

Q: What are the entries that should be made in QuickBooks from a settlement statement for real estate property?

A: There are a couple things to consider before you enter your closing statement in QuickBooks:

• Are you going to hold the property, rent it, and be a landlord? OR
• Are you going to fix and flip the property?

As you consider this, create a Asset Account for your property purchase and a Long Term Liability for your loan account. For making the actual entries, we strongly advise you consult your accountant.

TIP: Save time at tax time by creating a folder named Income Tax (year), make a copy of your settlement sheets, and file them in the folder. You will have all of your closing statements in one place to give to your tax preparer when the time comes.