DESKTOP EDITION CLOUD EDITION SERVER EDITION GUIDES FORUM

How to write-off portion of a loan account as a donation


#1

In the accounts for a trust, an initial sum is typically donated by a trustee to start up the trust. Thereafter additional funds may be loaned to the trust and accounted for via a loan account. There is a legal provision to donate a certain amount per year tax-free. I would like to do this by writing off a portion of the loan account annually. How does one account for this ? I assumed that I should do a journal entry to debit the loan account and credit the capital account, but this does not seem to work, the transaction ends up in the suspense account.


#2

When you credit capital account, you also need to select beneficiary and relevant sub-account of beneficiary.

See: http://guides.manager.io/businesses/capital-accounts/funds-contributed

If you don’t want to use Funds contributed sub-account, you can create new sub-accounts under Settings then Capital sub-accounts