If a loan services multiple properties, you can allocate it within TaxTank to ensure equity is displayed correctly according to the appropriate apportionment.
Step 1: Calculate the Apportionment
To accurately distribute the loan, first determine the percentage allocated to each property. Use the formula:
Property Loan Amount ÷ Total Loan Amount × 100 = Allocation Percentage
Example Calculation:
If your loan is structured as follows:
Property A: $150,000
Property B: $450,000
Personal Component: $20,000
Total Loan Amount: $620,000
The loan allocation percentages would be:
Property A: (150,000 ÷ 620,000) × 100 = 24.19%
Property B: (450,000 ÷ 620,000) × 100 = 72.58%
Personal Component: (20,000 ÷ 620,000) × 100 = 3.23%
Step 2: Apply the Apportionment in TaxTank
Once you’ve determined the correct allocation, follow these steps to set it up in TaxTank:
Go to Bank Feeds
Locate the loan account you need to apportion.
Click the three-dot menu next to the loan.
Select the properties associated with the loan.
Enter the correct allocation percentage for each property.
What if Part of the Loan is Personal?
If a portion of the loan is considered personal, it should be allocated to the property securing the loan. While this amount is not deductible for interest purposes, it still impacts equity and should not be excluded from the allocation.
By correctly apportioning the loan, you’ll ensure that property values and equity calculations remain accurate in TaxTank.
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