Net Charge-Off Overview
The net charge-off section of LoanPro accounts is designed to help you track any amounts on your accounts that you have deemed uncollectible. In LoanPro you can charge off an amount by logging a payment or credit for that amount and then setting the payment as a charge-off transaction. This will cause the account to have a charge-off balance. You can log recovery payments against this balance if money is received on an account that was previously deemed uncollectible.
Charged off portions of loan principal represent a loss on the value of a loan note asset. Losses can offset gains, or if there is a net loss, some portion of ordinary income. This will give you a tax break to help offset the loss on the note.
The net charge-off section is divided into two areas: History and Adjustments. The History section shows a record of charge-off transactions (payments that have been designated as charge-offs and recovery payments). This section should give a general overview of the charge-off situation for a given account. The Adjustments section will show a listing of payments and credits on the account. Here you can designate which, if any, of these transactions should be charge-offs.