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JulieParenti
Mar 31, 2021 1:48 PM UTC
Solved

classes vs locations

I have a client with multiple rental units under 1 company.  Is it better to keep track of each unit under as Classes or Locations.

 

john-pero
john-peroAnswer
Mar 31, 2021 4:44 PM UTC

Location tracking is only an option in QBO, not desktop. So, yes , it is better to use Class tracking for rental properties that are different deeded address but same EIN owner. Producing a P&L by Class gives you what is necessary to fill out Schedule E or Form 8825 depending on entity type. If the owners are different then each property needs to be in its own company file

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6 replies

SarahannC
Mar 31, 2021 4:19 PM UTC

Hello there, JulieParenti.

 

For the rental units under one company, you can use the Class feature to track the income services and products provided within each unit. In QuickBooks Desktop, you'll need to turn on class tracking first. Here's how:

 

  1. Go to the Edit menu, then select Preferences.
  2. Select Accounting, then go to the Company Preferences tab.>
  3. Select the Use class tracking for transactions checkbox.
  4. If you want a reminder when you haven't assigned a class, select the Prompt to assign classes checkbox.
  5. Select OK.

 

Then,  set up class categories for expenses and accounts. Once done, you can assign a class to the transactions you want to use. 

 

You can check this article for more details: Set up and use class tracking in QuickBooks Desktop. 

 

Let me know if you have other questions. Take care always.

john-pero
john-peroAnswer
Mar 31, 2021 4:44 PM UTC

Location tracking is only an option in QBO, not desktop. So, yes , it is better to use Class tracking for rental properties that are different deeded address but same EIN owner. Producing a P&L by Class gives you what is necessary to fill out Schedule E or Form 8825 depending on entity type. If the owners are different then each property needs to be in its own company file

ABDO MAHDY
Apr 17, 2022 10:17 PM UTC

Sir thanks for your helpful replies
Now i have QBO Plus
i have three Rental building each one 50 Units
Is better to use locations or use classes ?
should I record all units in classes or locations Or only the three buildings?

MaryLandT
MaryLandT
Apr 17, 2022 11:39 PM UTC

Hi there, ABDO MAHDY.

 

Allow me to step in and share some insights on how you can track each unit of the rental building.

 

Yes, you can use classes to track transactions by units, product lines, or any other meaningful segments in your business. Location tracking is used if you do business in multiple locations. 

 

When you're ready, here's how to turn on class tracking.

 

  1. Go to Settings ⚙ and select Account and Settings.
  2. Select Advanced, then select the Categories section to edit.
  3. Mark Track classes.
  4. Mark Warn me when a transaction isn't assigned a class. This is optional, but it's good to turn on, so when you look at reports, you know everything got classified.
  5. Under Assign classes, select One to entire transaction or One to each row in transaction.
  6. Click Save, then Done.

 

Select One to entire transaction if you don't need to enter a class for each product you sell to a customer. You can save time and assign one class to the entire invoice or sales receipt instead.

 

Once your settings are in order, you can set up a class list and track transactions by class. I'm adding these articles as a guide.

 

 

Keep me posted if there's anything else you need about tracking units from the rental building. I'll be right here to help you.

371Whit
May 24, 2022 9:20 PM UTC

Related question. Does anyone know if tracking different rental properties through QuickBooks using classes fulfills the "separate accounting" requirement to maintain an LLC (Series LLC).

Rubielyn_J
Rubielyn_J
May 24, 2022 11:47 PM UTC

Thanks for joining this thread, @371Whit.

 

In QuickBooks Desktop, class tracking lets you track account balances by department, business office or location, separate properties, or any other meaningful breakdown of your business. This lets you track segments you want to keep a close eye on.

 

If you're LLC series that has properties under the same EIN, you can use the class tracking to classify them. If different EINs, you'll have to maintain distinct company files. 

 

If the one LLC, owned several properties, and the properties were not registered as an LLC individually then one business file with classes will work.

 

For more details about this, please see this article for reference: Set up and use class tracking in QuickBooks Desktop.

 

Additionally, since class tracking can be used in most transactions, it makes it easier for you to generate reports to compare the balances across multiple classes, departments, or locations. That being said, let me share this link to help filter, sort, or total reports by class. 

 

Keep me posted if you have other questions about tracking your rental business. I'll be happy to help you again. Stay safe!

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