Income

Question

I sold a property and the money came from the lawyer into my chequing account then bounced out to pay off the mortgage. How can I prevent that money from showing as income? it seems to me it should show as a transfer from the asset account

Frankx · Answer

Hi @Equestionbox

I assume that you are actually asking how to record the property sale in Quicken.  When you sell an asset - in this case real estate - you need to record the transaction in Quicken as a sale of that asset.  For the purposes of illustrating how to record such a transaction in Quicken let's assume the following:

You paid 50,000.00 for the property.
You sold the property for $80,000.00
You had to pay fees in connection with the sales transaction (such as brokerage fee, recording fees, closing fees, and attorney fees) in the total amount of $8,000.00
You had taken out a mortgage on the property and that mortgage's balance at closing was $35,000.00

A summary of the sale transaction would look like this:

Total sales price                   $80,000.00
Less:  Mortgage balance       -35,000.00
   "      Fees paid at closing    -  8,000.00
                                            ____________
Net proceeds from sale           37,000.00

In Quicken - this illustrative transaction (as applied to your scenario) would be recorded as follows:

Entry 1 - to record the deposit on closing:
Cash Deposit to your bank account ( $80,000.00 less Fees paid)   $72,000.00
Expenses of Sale (closing costs)                                                       $8,000.00
        Property                                                                                                        $50,000.00
        Gross gain from sale of property                                                                   $30,000.00

Entry 2 - to record the mortgage pay-off:
Payment to Mortgage Co. (to pay-off loan)                                      $35,000.00
Check from your bank account                                                                               $35,000.00

Let me know if you have any followups.

Frankx