- Jul 6, 2012
Hi Everyone, I am new to the REIN family. I'm seeing a lot of controversy regarding the accountIng of the credit installments on an RTO. Are these installments treated as income or trust deposits during the interim period prior to formal verification of deposit for the lender? Many articles from prominent investors are indicating it is income. If the spread on the deal supports such "withdrawals" then it is recognized net income I'd think. If it is a trust deposit, then it wouldn't make sense to treat this as accounts receivable as it would be taxable. In addition, If a trust account is established from the get go, then the buyer/tenant has established equitable interest which You don't want to do. What is the right way to account for these installments?