Brokerage, lending & investing

Books and taxes for note investors.

A mortgage note bought below its face value, a servicer's monthly statement splitting interest from principal, legal costs on a non-performing note headed toward foreclosure, and a note that finally paid off in full. Gus sorts all of it, an accountant checks every transaction, and you get one number a month.

Book a call What we handle
  • From $197 a month
  • An accountant on every transaction
  • Cancel whenever
AugustExample month
$11,500
what you made

August brought in $11,500. The Carter note's servicer statement split $1,900 as interest and the rest as principal, so only the interest counted toward what you owe.

  • Servicer statement, Carter noteNote interest income
  • Servicer statement, Carter noteNote principal repayment
  • Note purchase, discountedNote acquisition costs
  • Loan servicing feeServicing costs
  • Attorney, non-performing noteDefault and foreclosure costs
Money in$19,600
Money out$8,100
Set aside for taxes$1,600
An example month. Yours will have your numbers.

Why your books are different

Note investing books go wrong at the discount and the default.

Buying a mortgage note below its face value and collecting on it over time is a different business than lending your own cash from scratch. When the books do not track the discount you bought at, or separate a performing note from one headed toward foreclosure, the real return on a note portfolio never adds up.

  1. 1

    A note bought at a discount gets tracked at its face value

    Buying a note for less than what the borrower still owes is common, but if the note is tracked as if you paid full face value, your real cost basis and your real return on the discount both come out wrong.

    What we doBooks the note at what you actually paid for it, so the discount is part of your real return as payments come in over time.
  2. 2

    A servicer statement's interest and principal split gets ignored

    A licensed servicer collecting payments on your behalf sends a statement splitting each payment into interest and principal, and if the whole payment gets booked as income, you overstate what you actually earned that month.

    What we doBooks only the interest portion from the servicer statement as income, keeping principal repayment separate and non-taxable.
  3. 3

    A non-performing note's costs get mixed with performing notes

    Legal and foreclosure costs on a note that has stopped paying are real costs specific to that one note, and if they blend into overall servicing costs, you lose the ability to see which notes in your portfolio are actually worth the trouble.

    What we doKeeps default and foreclosure costs tied to the specific non-performing note, so you can see its real cost against your performing notes.
  4. 4

    A note payoff looks like a straight windfall

    When a note pays off in full, the payoff amount includes your original discounted purchase price coming back plus whatever interest accrued, and if the whole payoff is booked as income, it wildly overstates what you actually earned on that note.

    What we doSplits a payoff into the return of your purchase cost and the actual interest earned, so the real profit on that note is what shows up as income.

Your categories

The categories Gus keeps for a note investor.

Set up once for how a note actually performs from purchase to payoff. You never pick a category. He does, and an accountant checks it.

Money in

  • Note interest incomeThe interest portion of every payment, from a servicer statement or direct collection.
  • Note principal repaymentReturn of the amount you paid for the note, kept apart from interest.
  • Note payoff proceedsThe lump sum when a note pays off in full, split into cost basis and interest earned.
  • Note broker fees receivedFees earned for brokering a note sale between other investors.

Money out

  • Note acquisition costsThe discounted purchase price paid for a note, plus any due diligence costs.
  • Servicing costsFees paid to a licensed servicer to collect payments and track balances.
  • Default and foreclosure costsLegal and administrative costs tied to a specific non-performing note.
  • Title and lien search costsCosts to verify a note's collateral position before purchase.
  • Due diligence and analytics toolsSoftware and data used to evaluate notes before buying them.

What we watch for you

  • Yield on discounted purchase

    Your actual return based on what you paid for a note, not its face value.

  • Performing versus non-performing notes

    How much of your portfolio is collecting reliably versus in default.

  • Cost per non-performing note

    Legal and foreclosure costs tied to a specific troubled note, to weigh against its eventual recovery.

  • The set-aside

    What you will owe on interest earned, tracked every month, so April is a number you already knew.

Ask Gus

Things note investors ask Gus.

Text him like you would text anybody. He answers in plain English, and when a question is above his pay grade, an accountant looks and gets back to you.

I bought a note for sixty cents on the dollar. Does that discount matter for my books?

Yes. I book the note at what you actually paid, not its face value, so as payments come in, your real return includes that discount, not just the stated interest rate.

The servicer statement shows a payment split between interest and principal. Which part is taxable?

Only the interest portion counts as income. The principal is the note balance coming back to you, which is not taxed again.

A note I bought stopped paying and I am working with an attorney on foreclosure. Is that cost tracked separately?

Yes. I keep legal and foreclosure costs tied to that specific note, so you can weigh what it is costing against your performing notes.

The tax side

The tax side of note investing.

Most of what matters here is that a discount is part of your return, and only interest, never principal, is taxable income.

What your return has to get right

Your accountant signs it, so it gets done right the first time.

  • Interest income, not principalOnly the interest portion of a note payment is taxable income. Principal repayment, including recovering the discount you bought the note at, is a return of your own capital.
  • Self-employment tax on note incomeInterest income from note investing can carry self-employment tax at 15.3 percent up to the Social Security wage base of $184,500, depending on how the activity is structured and how actively you are involved.
  • Quarterly estimated paymentsWith interest income landing across notes on different schedules, estimated payments due April 15, June 15, September 15, and January 15 need a real look at the portfolio's expected performance.
  • Non-performing note costsLegal and foreclosure costs on a note that has stopped paying are usually deductible business costs, tracked against the specific note they relate to.

Deductions note investors miss

Your bookkeeper knows what to look for in your statements. You never have to.

  • Discounted note acquisition costs
  • Loan servicing fees
  • Legal and foreclosure costs
  • Title and lien search fees
  • Due diligence and analytics software
  • Note broker fees paid
  • Travel to inspect collateral properties
  • Accounting and tax preparation costs
  • Bank and wire transfer fees
  • Errors and omissions or investor liability insurance
  • Office space or a shared suite
  • Continuing education on note investing

General information about 2026 federal rules, not advice for your business. Your accountant looks at your actual numbers before anything gets filed.

All year, not just April

A note investor's year, kept every month.

Notes pay, default, and pay off on their own schedules. Your team keeps you ahead of what each one means for taxes. Every month in between, your bookkeeper closes the books and speaks up the moment something looks off.

  1. January

    Plan the year

    Last year's return gets started, and a monthly set-aside is planned around interest income expected from the portfolio.

  2. April

    Filed. Done.

    Your return is filed and signed. No surprise bill, because the set-aside has been running since January.

  3. July

    Halfway check

    Where you stand, what you will owe, and whether any notes paid off or went into default this year.

  4. October

    Before the portfolio review

    Many note investors weigh selling off a troubled note or buying a new batch before year end. Gus looks at which notes are expected to pay off, and what a non-performing note is really costing, while there is still time to decide.

What you get

Starts at$197a month

What you pay depends on what your business needs, and it does not move after that, busy season or slow. No hourly bills, no surprise invoices, no setup fee.

Book a call
  • Monthly bookkeeping

    Every transaction sorted into categories set up for note investors. You never categorize a thing.

  • An accountant checks every transaction

    Real review, every month, before your books close. Not a spot check.

  • Your business tax return, filed

    Prepared, reviewed, and signed by that same accountant every year.

  • The monthly number

    What you made, what you spent, what to set aside for taxes.

  • Your own bookkeeper

    A real person assigned to your business, in the app whenever you need them. No hold music.

  • On your books all year

    Every month, not just in April. Your team speaks up whenever something is worth your attention.

  • Cancel any time

    No contract. No cancellation call. Your books are yours.

Straight answers

Questions note investors ask first.

How does Gus track a note I bought below its face value?

It is booked at what you actually paid, not the face value, so your real return, including the discount, is what shows up as your books track payments over time.

My servicer sends a monthly statement. Does Gus work from that directly?

Yes. Gus uses the servicer's split between interest and principal, booking only the interest as income and keeping principal as a return of your own capital.

I have both performing and non-performing notes right now. Can Gus keep them separate?

Yes. Each note is tracked on its own, so a troubled note's legal and foreclosure costs never blend into what your performing notes are actually earning.

A note I own just paid off in full. How much of that is taxable?

Only the interest earned over the life of the note is taxable. The rest is the return of what you originally paid for it, which is not taxed again.

I occasionally broker a note sale between two other investors. Does that get tracked differently?

Yes, broker fees received are kept in their own category, separate from interest income on notes you actually hold.

My note portfolio has grown and my spreadsheet tracking is falling behind. Can Gus catch up?

Yes. Send the bank statements and servicer reports you have. Gus sorts every note's interest and principal, and most investors know where they stand within a couple of weeks.

Is a real accountant checking my books?

Yes. You get your own bookkeeper, Gus does the first pass on every transaction, and an accountant checks every one before your month closes. That same accountant prepares, signs, and files your business return. Goatkeeper is not a CPA firm, and we never pretend a person looked when they did not.

What does it cost, and can I cancel?

It starts at $197 a month, depending on what your business needs. No setup fee, no hourly bills, no contract. Cancel any time from the app, and your books go with you.

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Book a call

Pick a time. That's the whole signup.

Fifteen minutes with a real person on our team. They look at where your books are, tell you straight what it takes to get caught up, and get you set up on the spot if it fits.

  • $197 a month to start
  • An accountant on every transaction
  • Cancel whenever