MHP Accounting Question

Hi! Is it correct to say a park with mostly TOHs does not require accounting for each individual lot?

My accountant was initially suggesting we need to track income and expenses per lot. My take is that if we have mostly TOHs, then we should track expenses for the park as a whole. The handful of POHs we do have would definitely require their own accounting.

Thanks!

I am not even sure how you would do this, but why?

From a management point of view, this seems like a good idea if you’re talking about capital repairs, common repairs & maintenance, parts & labor, stuff like that. I don’t imagine you need to allocate your payroll, insurance or advertising costs on a per-home basis, or your travel costs or software costs or whatever other admin you have.

For management purposes, you should account for whatever you need/find useful. For tax purposes, I suppose only the capital repairs need to be tracked on a per-home basis (so that if you sell the home you know what your basis is). I’m open to other points of view though.

I think the accountant was over-reaching. We have 327 lots… impossible to track in the accounting software. We use a spreadsheet for monthly rent rolls and track it there… Then the accounting software just tracks the totals by category, ie lot rent, fines, utilities, vehicle charges, storage, etc.

Thanks! Once we discussed, the accountant understood we don’t need to track expenses for each unit. The exception is POHs, which are few and easy to track. Tracking of POHs is really only related to capital improvements for cost basis reasons, as mentioned by @Brandon above.

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You may also want to talk to your accountant about what their threshold is for tracking specific expenses related to the park owned homes. If they tell you anything under $2500 can be booked as an expense instead of having to assign it to a POH and amortizing it, it will be much easier to handle. Most expenses related to POH upkeep should be less than $2500 making your life much easier