How do I record a owner's non-cash contribution in the form of an asset?

STP · ‎February 28, 2019

Hi,

I am using quickbooks self-employed. I operate a single member LLC and I contributed equipment to the business. How do I record this in quickbooks self-employed. Also, what method of depreciation is used, can the parameters so as useful life, etc be changed?

Thanks.

john-pero · ‎February 28, 2019

You don't do any of what you want to do in QBSE. My suggestion since you arec running as an LLC and need equity accounts (set of 3-4) that you cancel your QBSE and sign up for QBO where you can add and edit the equity and fixed asset acvounts necessary .

To handle contribution of an asset into the business (in true double entry bookkeeping) you would enter an Expense using Member Contribution Equity as source and whatever the Fixed Asset is at FMV as the detail.

View solution in original post

john-pero · ‎February 28, 2019

You don't do any of what you want to do in QBSE. My suggestion since you arec running as an LLC and need equity accounts (set of 3-4) that you cancel your QBSE and sign up for QBO where you can add and edit the equity and fixed asset acvounts necessary .

To handle contribution of an asset into the business (in true double entry bookkeeping) you would enter an Expense using Member Contribution Equity as source and whatever the Fixed Asset is at FMV as the detail.

STP · ‎March 01, 2019

Thank you John. It seems like I do need to consider changing versions.

Malcolm Ziman · ‎March 01, 2019

@STP

There is no balance sheet on the tax return for a single member non-corp LLC, so there is no need from a tax point of view to record any balance sheet activity, which owner's contribution is. If you want to run a balance sheet for your own purposes then QBSE does not do that.

The depreciation is a year-end process which could be done in the tax prep software, so there is no need to post it in QBSE. Again, if you want to do that for your own purposes, QBSE is not the right program.

As to useful life, that depends on the asset, but you can expense all of it if the cost is less than $2500, or even more in 2018 I believe, or use section 179 to expense all of it if more, in the first year. This is a tax question.

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How do I record a owner's non-cash contribution in the form of an asset?