Sale of Property (I need help)

[mdelgado10]

A client who is a 1065 LLC got a loan in 9/2015 for $900k, $450k of this loan was used to buy land. They split this land into three properties and built a house. I created an asset for $300k for each property (split between land and construction in Progress) and a loan for $300k for each property. In 2017 they sold two properties. One in September and the other in October. The total sales price for both properties was $1 million. The gain on the settlement statement shows a total of $450k for both properties. The debit on the settlement statement shows $300k on each property paying back the loan.Once I back out the assets and the loan associated with the sale I have a remaining number. This debit amount (plug?) is $668k for both properties. The $300k loan per property included half for the land and the other half for materials. I already did the bookkeeping for 2017. The expenses not associated the bookkeeping total $100k. Why is there a debit amount of $568k? What do I do with that? If I leave it as COGS-Materials there is a $218k profit on the P&L. Why do I think the P&L should match the settlement statement? Please help.

[kathyc2]

A client who is a 1065 LLC got a loan in 9/2015 for $900k, $450k of this loan was used to buy land. They split this land into three properties and built a house. I created an asset for $300k for each property (split between land and construction in Progress) and a loan for $300k for each property. In 2017 they sold two properties. One in September and the other in October. The total sales price for both properties was $1 million. The gain on the settlement statement shows a total of $450k for both properties. The debit on the settlement statement shows $300k on each property paying back the loan.Once I back out the assets and the loan associated with the sale I have a remaining number. This debit amount (plug?) is $668k for both properties. The $300k loan per property included half for the land and the other half for materials. I already did the bookkeeping for 2017. The expenses not associated the bookkeeping total $100k. Why is there a debit amount of $568k? What do I do with that? If I leave it as COGS-Materials there is a $218k profit on the P&L. Why do I think the P&L should match the settlement statement? Please help.

So many problems with this post, I'm not sure where to start....

Taking out a loan does not create an asset.
Purchase of land would create an asset, as would payments used to build house(s).
A settlement statement does not show gain.
Why do you think settlement statement should match P&L? I have no idea why you would think that.

[mdelgado10]

Details

This is a new client and the balance sheet on their three LLC's were blank although two should have had land and loan on it. To give you an example on one of the properties sold in 2017. The sale price was $596k. The $302k loan was repaid on the escrow statement. The net proceeds is $256k. For whatever reason that looks like the gain to me. I am weakest with settlement statements.

[spanel]

This is a new client and the balance sheet on their three LLC's were blank although two should have had land and loan on it. To give you an example on one of the properties sold in 2017. The sale price was $596k. The $302k loan was repaid on the escrow statement. The net proceeds is $256k. For whatever reason that looks like the gain to me. I am weakest with settlement statements.

The problem is that your trying to back into numbers that dont exist on the settlement statement. Your going to get a few numbers off it.. sale price, loan repayment and settlement fees.

All the rest of the info is coming from your client. Land cost, materials cost, labor, utilities, etc.

You have NO idea what amount of the loan went into the each property anymore than they took out personally by just looking at the settlement statement.

Chris