REcord a real estate sale

my home is listed as an asset under Property/Assets. In the transaction field it only shows the ability to do "increase" or "Decrease". However in my situation I want to put the sales price so it figures out the long term capital gain. How is it best to do this in Quicken? Thanks in advance all!!

Answers

  • Tom Young
    Tom Young SuperUser ✭✭✭✭✭
    First, I'd suggest eliminating all entries that Quicken might have made based on "Zestimates."  When it comes to calculating gain or loss for IRS purposes it's only your true purchase cost plus bone-fide improvements that dictates cost basis for purposes of calculating gain or loss.
    Quicken is really only programmed to calculate gain or loss associated with the sale of securities bought and sold within an Investment Account. Your Asset Account has no similar functionality.  So there's no "wizard" that's going to calculate the capital gain based upon the sales price.
    A house sale can be difficult to record for most people since there's typically so many moving parts to a house sale.  Loan payoffs, realtor broker commission, allocation of property taxes, pro-ration of interest, seller credits, etc., etc., etc. all affect the net check you receive and all of those elements need to be accounted for you to properly record the sale.  So as a practical matter your "sales price" almost never actually determines your gain or loss on a sale.  At the very least you need to deduct the most obvious cost of sale  - broker's commission - to come to a gain or loss figure, but typically a lot of other factors figure into a "correct" accounting entry.
    In contrast, the typical buy/sell of a security is a piece of cake to account for.  You bought some security for a cost of [ (# of shares x cost per share) + broker commission] and later sell the security for proceeds of [ (# of shares x selling price per share) - broker commission], and the broker deposits the net sales proceeds in your account.  Easy-peasy.
    Unless you've adept at interpreting the HUD-1 and have been accounting for all your "home" costs in a true accrual fashion, (e.g., setting up property taxes a a prepaid or liability and accruing the monthly expense), you may want to simply zero out the home Account - enter a "Decrease" in the same amount as the Account balance with an offset to the same Account and figuring your gain or loss outside of Quicken if you need to report to the IRS.
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