QB Online, Escrow and Operating bank accounts- record sales when money transfers from Escrow to Operating

Y10 Tax · ‎January 06, 2021

Hi Everyone,

I would really appreciate help on this.

I have a client that is a Real Estate agent. He has an Escrow bank account where he holds funds belonging to the buyer until they close on the house. When they close, he transfers the money from the Escrow account to his operating account.

I need to do two things:

1. Record the outgo from the Escrow account to debit the liability of contra escrow account and credit the Escrow bank account

2. Record the incoming transaction in the operating account as Sales to show it is income.

What would you suggest the best way to record this would be?

Thanks!

john-pero · ‎January 06, 2021

I would first suggest he get physical checks for the escrow account. Escrow should not in my view get comingled with operating. But if that is not practical then a bank account to bank account transfer is appropriate for dispersal of held funds to various payees. You can write a digital check which will allow more detail than just a transfer.

For the fees kept by the agent, again I would suggest physical checks from escrow paid to the agent and then deposited wherever. Those would specify the liability deduction and when deposited you post income. You could use a sales receipt but it is not absolutely necessary

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QB Online, Escrow and Operating bank accounts- record sales when money transfers from Escrow to Operating

QB Online, Escrow and Operating bank accounts- record sales when money transfers from Escrow to Operating

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