If you bought a note instead of originating it yourself, tell NoteHarbor how — it unlocks basis tracking, a real yield figure, and a set of note-buyer tax cards, all computed from what you actually paid.
Recording the acquisition
You record a purchase in two places, and both use the same fields: the Acquisition section of the loan wizard (step 2, Loan Terms) when creating the loan, or the Acquisition section of Edit Loan afterward.
First choose how the note was acquired:
- Originated — you made the loan yourself. No purchase fields apply.
- Purchased — you bought this note from someone else. A Purchase Type picker appears:
- Total — you bought the whole note.
- Partial — you bought a slice of each payment (the next chunk of principal, at your own yield).
- B Schedule — you bought a specific set of scheduled payments, amortizing at the note's own face rate.
Once you pick a purchase type, four fields matter:
- Date Bought — the purchase-closing date. It's the basis date every downstream figure (yield, discount accretion, capital-gains holding period) anchors to.
- Price Paid ($) — what you actually paid — your tax basis, not the note's face value. This is usually a discount (or occasionally a premium) to face.
- Amount Bought ($) — required for Partial and B Schedule only: the face amount of the slice or B-schedule piece purchased. It can't exceed the note's balance. Leave it blank on a Total purchase (the whole note's face is implied).
- Investor Yield (%) — your target/contract yield. Optional — leave it blank and NoteHarbor computes an implied yield later from the price paid and collections to date.
Switching types clears stale companions
The purchase-type fields are guarded against leftover data — with one gap worth knowing about:
- Switching back to Originated clears the loan-level Date Bought, Price Paid, Amount Bought, and Investor Yield fields — so a later re-toggle to Purchased can't silently resurrect stale figures from those fields.
- It does not touch the separate Tax Tracking worksheet. If a purchase was also recorded there independently (Acquisition Strategy = Note Purchase, with its own acquisition date and purchase price), that entry survives the revert and can still drive the worksheet's "Owned since" caption, the CPA export, and — because the yield engine falls back to the worksheet's entry when the loan itself isn't a computable purchase — even the Yield stat. Clear the worksheet's acquisition entry too if you want a clean slate.
- Switching Partial or B Schedule → Total clears Amount Bought (a Total purchase doesn't carry a slice size).
- Switching Originated → Purchased requires Date Bought and Price Paid to be set (either now or already on the loan) before the save goes through.
What appears afterward
The Yield stat
Every loan page shows a Yield figure in the key-metrics row — Realized Yield for a closed/sold/paid-off/foreclosed/charged-off/archived note, Yield to Date for one still open. Both are an annualized XIRR (Actual/365) of the note's actual cash flows — what was paid for it versus every payment collected (escrow excluded — it's the borrower's money, not lender return) — with a hypothetical par-payoff of the current balance standing in for the terminal flow on an open note.
The stat is deliberately honest about when it can't be computed — it simply doesn't appear rather than showing a misleading number. That happens for:
- Liability loans (yield is an asset-side return measure; a liability is your cost of funds).
- Partial and B Schedule purchases — the price you paid bought only a slice of the payment stream, but the loan's full collections are the whole borrower stream, so pricing the whole thing against your slice basis would price the wrong economic unit. (Their own dedicated position cards below carry the real numbers.)
- A Total purchase with no establishable basis (incomplete purchase fields and nothing on the tax worksheet either) — falling back to face-at-origination would be exactly the wrong-basis mistake this guards against.
- A realized yield on a note disposed by an installment sale — the sale proceeds are deferred over the buyer's paper rather than collected at the sale date, so booking them as a lump sum would overstate the return. (The installment-sale Form 6252 figures still compute normally.)
- Any young or odd note where the cash-flow series simply has no solvable rate yet (no inflows, a single-date series, and so on).
The four Tax Tracking cards
For notes bought at a discount, the Tax Tracking tab grows dedicated note-buyer cards — informational for your CPA, never a filed number.
Discount Accretion (Total purchases bought below face). Every principal dollar collected since purchase splits by the basis ratio (price paid ÷ face at purchase) into return of capital (recovering what you paid) and discount earned — typically ordinary income, not capital gain. The card breaks discount earned out lifetime and for the current year. Hand the ratio-method split to your CPA; it's information for the return, not the return itself.
Capital Gains (disposed notes — sale, discounted payoff, or foreclosure at fair market value). Classifies the disposition as long-term or short-term: long-term requires the holding period to be more than one year — acquired day 0, disposed on the one-year anniversary itself is still short-term; one day later is long. A discounted payoff shows the classification and dates immediately but flags needsBasisEngine — leaving the actual gain blank — until the remaining-basis split is available; a foreclosure without a recorded fair market value flags needsFmv the same way. Both are an honest "not yet computable," not a zero.
Partial — Investor Position (Partial purchases). Runs an independent schedule at your own yield, right beside the payor's unchanged schedule: it amortizes your basis against the cash your slice has actually collected, tracks how much of the purchased principal hold is collected, and shows what an early payoff today would hand you (return of capital and income, basis-first). If no yield target is set, the rate shown is implied from price paid and collections to date instead.
BSchedule (B Schedule purchases). Runs a triple ledger: the payor's own schedule (untouched), a B schedule amortizing your purchased face slice at the note's own contract rate (what the seller reports against), and your investment ledger amortizing the price you paid at your yield. The gap between the B schedule and your investment basis is the unrealized discount — and under this treatment there's no tax event until payoff: the discount isn't recognized as payments come in, only when the note is paid off or sold (a windfall recognized in one event). That deferral treatment is aggressive and fact-specific — always confirm it with your CPA before relying on it.
Sizing up a note before you buy it? Deal Analyzer prices any of these three structures — Full purchase, Partial, or B Schedule — before you commit, using the same math these cards use afterward. For the acquisition-to-disposition tax worksheet these cards live alongside (Form 6252, CPA export), see Tax tracker & CPA export.