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Level 3

Record Income Free Grant

How do you record an income free grant?  There are no restrictions and it was given as a stimulus grant due to COVID19 from the City of San Francisco.

 

Thank you!

 

Solved
Best answer April 23, 2020

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Level 15

Record Income Free Grant

No, not in an s-corp, there is no equity accounts in an s-corp.  There are shareholder accounts, but they can not be used the same way as equity account can be.

 

Make an income account under other income called non-taxable income and use that, then let the tax accountant handle it

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9 Comments
Highlighted
Level 15

Record Income Free Grant

Either use Other Income or create an income acct named donation income, and use that account as the source account for the deposit

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Level 3

Record Income Free Grant

Hi Rustler! Thanks for the quick reply :)

 

I looked at the account and detail types in QBO but they don't seem to apply here.  I used Other Miscellaneous Income and it appears on the P&L at the bottom after expenses.  Since this is income free I was trying to keep it off the P&L.  One thought I had was to add it as Other Current Asset but I don't think that is correct.

 

If I use Income, my options in QBO for detail type are:

  • Discounts/Refunds Given
  • Non-Profit Income
  • Other Primary Income
  • Sales of Product Income
  • Service/Fee Income
  • Unapplied Cash Payment Income

If I use Other Income my options in QBO for detail type are:

  • Dividend Income
  • Interest Earned
  • Other Investment Income
  • Other Miscellaneous Income
  • Tax-Exempt Interest

 

Highlighted
Level 15

Record Income Free Grant

Income tax free?  If that is the case then

 

if  you are a sole proprietor for income taxes, use owner equity investment instead of an income account

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Level 3

Record Income Free Grant

Yes income tax free.  It's for one of my clients and he's an S corp.  Would it still be equity?  That's actually what I did first and second guessed myself :)

Highlighted
Level 15

Record Income Free Grant

No, not in an s-corp, there is no equity accounts in an s-corp.  There are shareholder accounts, but they can not be used the same way as equity account can be.

 

Make an income account under other income called non-taxable income and use that, then let the tax accountant handle it

View solution in original post

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Level 3

Record Income Free Grant

Thanks for your help!

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Level 1

Record Income Free Grant

Want General Ledger Account number do you recommend for Other Income from PPP Loans?

TIA

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Level 1

Record Income Free Grant

It is a long term debt until forgiveness is accepted. Since they just rolled the forgiveness application out, Record as long term debt. Once forgiven, move to other income account at the very bottom of your chart of accounts.

Highlighted
Level 1

Record Income Free Grant

HELLO I AM A SOLE PROPRIER AND WILL RECEIVE A GRANT FROM CITY THAT I DON'T HAVE TO PAY BACK OR TAXED.  HOW DO I SET IT UP ON MY 2016 MAC DESKTOP VERSION. I DONT WANT IT TO SHOW UP ON MY P&L THANK YOU!

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