Posted by Bob on January 13, 2004 at 01:40:13:
>I don’t think self employment tax will be an issue if you use an LLC that is “passive”
My reasoning is that if se-tax would have been due on the discount as it is earned, you cannot avoid it (till you get audited, anyway) by selling to a related-party LLC and treating the discount as additional interest.
Notesmith pro and John Hyre’s KISS users… - Posted by Dan(MD)
Posted by Dan(MD) on December 09, 2003 at 16:51:10:
I have Notesmith to track my notes and I’m using John’s Course, but I’m now entering everthing into three accounts, notesmith for the notes, quickbooks for the notes and the expenses, and my personal quicken account to keep track of my checking account.
Have you tried to export from notesmith to Quickbooks? Does it work smoothly? I like both programs but I don’t want to shell out the extra $200 if it won’t do what I want it too…
Thanks
Dan
Re: Notesmith pro and John Hyre’s KISS users… - Posted by Karl (Oh)
Posted by Karl (Oh) on December 09, 2003 at 21:59:21:
Dan,
I also use Notesmith and Quickbooks. (Right now I’m actually taking a break from entering my Notesmith info into Quickbooks!) I’ve played with the Notesmith Pro export into Quickbooks feature, and it worked, but I don’t use it.
I enter a discounted principle amount for each note and for each note payment into Quickbooks per Hyre’s aggressive cash method. The data between the two programs doesn’t match in this case, so I just enter the info twice. Maybe someone else has a solution to get around this problem. I’ll be watching this thread to see what others are doing. I’d like to use this export feature.
You can export the Notesmith info to as ASCII file, make changes, then import into Quickbooks, but I don’t think you’re saving much time over just doing double entry.
If you already have the programs, what’s the extra $200 for?
Karl Kleiner
Re: Notesmith pro and John Hyre’s KISS users… - Posted by Dan(MD)
Posted by Dan(MD) on December 10, 2003 at 10:51:05:
I have regular Notesmith, not Notesmith Pro, $200 to upgrade. After reading through the manual a few times it seems to me that you can make a custom form in Notesmith Pro that includes the 45/55 split for the principle payments and import that…have you tried to make a custom form? I don’t understand how the export to quickbook works since I don’t have that feature and the manual isn’t too clear about it.
Thanks
Dan
Re: Notesmith pro and John Hyre’s KISS users… - Posted by Lyal
Posted by Lyal on December 10, 2003 at 07:51:33:
Karl,
Would it be easier to “sell” the notes to another LLC that you control then use Notesmith to track principal / interest starting with the new basis (value of the note when you purchased it in the new entity) directly.
Makes sense to me as I think of it but…
Lyal
Re: Notesmith pro and John Hyre’s KISS users… - Posted by Bob
Posted by Bob on January 12, 2004 at 19:30:15:
I too considereed this. The numbers won’t work out right. The hypothetical additional interest in each payment won’t match the discount. That is, if you claim that your $5k note is really only worth $2.5k, so that 1/2 of the principal received each month is taxable and 1/2 is not, an amortization schedule using 1/2 the principal but the same payment won’t produce the same result. Further, the taxation is different. Self-employment tax is owed on the taxable principal, but not on the interest payments. Unfortunately, you must keep track of them separately.
Re: Notesmith pro and John Hyre’s KISS users… - Posted by Lyal
Posted by Lyal on January 12, 2004 at 20:02:26:
Bob,
I don’t think the interest needs to match the discount. There’s a time factor involved there that will affect the numbers.
You need to generate a new amort table using the new “Present Value” and the new interest rate (yield) that will be calculated.
I don’t think self employment tax will be an issue if you use an LLC that is “passive” although I could be full of crap and this would be a question better answered by John Hyre.
All the best, Lyal