I am trying to close out a property that is listed under Property & Debt

I have been tracking a property and have sold it and want to remove it showing a capital gain calculation.

Answers

  • Frankx
    Frankx SuperUser ✭✭✭✭✭
    Hi @Dodger Lou

    I assume that you have entered the buy of the property as well as any improvements in a Quicken account.  Now that you've sold it, you need to make an entry to record the sale.  That entry should include all relevant data from the HUD-1 form that you received from the settlement agent.  And the difference between your costs (including costs of the sale) and the basis of the property (the account balance in your Quicken account just prior to the sale) will be your capital gain.

    Hope this helps.

    Frankx

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  • Tom Young
    Tom Young SuperUser ✭✭✭✭✭
    edited February 23
    In a "real life" situation it can be difficult to correctly analyze a closing statement and determine an accurate gain on sale and then make a comprehensive accounting entry that debits (increases) cash, debits, (decreases) the loan on the property, and debits and credits all the "current expenses" (property taxes, interest to closing, rent proration, etc.).
    A very generalized structure of the needed accounting entry for a property sale would be along the lines of:
    Debit (increase) Cash in Bank                    AAA                          ("Cash to you" out of escrow)
    Debit (decrease) Loan Liability                   BBB                           (Mortgage loan payoff)
    Credit (decrease) Property Account           CCC                           (Cost of property sold)
    Debit/Credit Various Expense Categories DDD                          (e.g. Property Taxes, Interest, etc.)
    Credit (increase) Capital Gain Category     EEE                           (Balancing entry to make Debits = Credits)
    You'll need to create the Capital Gain Category on your own if it's not already in your file and assuming the property is in a standard asset Account, not an investment Account.
    Without knowing what entries you might have already made in your Quicken file, (e.g., you've deposited the cash and wiped out the existing mortgage), it's really impossible to state "here's the entries you need to make."
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