I started using GnuCash and have learned the basics of double entry bookkeeping for managing rental income. I have managed to create a working Chart of Accounts that works well and accurately (includes concepts like depreciation and withholding tax etc)
The only thing I haven't been able to do is: the tax authority where I live gives a tax deduction/relief/allowance/exemption of $1,000. How do I record this in a double-entry method? I thought I could record it as Expenses:Deduction since it will be used to offset the taxable income but what about the second entry? Where does that go? I tried Liabilities:Tax but something seems incorrect since if I record an expense in Expenses:Deduction, my Liabilities:Tax also increases instead of going down. Any ideas?