What is the thinking behind self-transfer?

thansen Member ✭✭
Why categorize a transaction as a 'self-transfer'? What is the purpose of doing so?

For instance, under 'Property & Debt' you can track the value of your home as reported by Zillow. Quicken retrieves the value from Zillow and enters a transaction into your Asset Account used for tracking your home value. Those transactions show up as self-transfers. Why? What is the purpose of doing it this way?

Why not track it the same way you track equity appreciation (in accounts under 'Investing')?


  • Jim_Harman
    Jim_Harman SuperUser ✭✭✭✭✭
    A self transfer is a way of adjusting the cash balance in an account without the change being recorded as an income or expense. It is used for example to set the opening balance of an existing account that you start tracking in Quicken.

    If you want to think of your house as an investment, you could create an Investing account with one share of a security called "House" and the share price equal to the value of the house. You would adjust the share price as the value of the house changes. But remember that your house gets special capital gains treatment when you sell it, so it probably does not make sense to treat it like a security.

    Many other personal assets, such as cars, do not generate capital gains or losses for tax purposes when you sell them, so there is little reason to include them in Quicken's capital gains tracking. 

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  • Tom Young
    Tom Young SuperUser ✭✭✭✭✭
    edited March 2022
    The "self-transfer" is a necessary action for most any personal accounting program because most people start using a personal accounting program when they have many different "real world" accounts, accounts that might have been in existence for many years, and as a practical matter can't enter all the historical transactions in their new Quicken Accounts in order to come to a current balance in those Accounts.  The answer here is to let users enter a "getting started" balance (Quicken calls it an "Opening balance") in those Accounts, a number typically taken off a current bank statement, credit card statement, etc.
    Another reason for a self-transfer action is that people generally don't have the necessary accounting knowledge and acumen to make a comprehensive accounting entry for even a recent transaction if that entry is at all complex. 
    Take the example the purchase of a house where the buy has deposited money in escrow, taken out a loan with 2 points, has closed on the house and received a HUD-1 Settlement Statement that has 23 lines with dollar amounts.  Most people aren't going to be able to process all that and make a comprehensive accounting entry for the purchase, but they can establish a Quicken "House" asset account and enter the purchase price (a self-transfer entry) and establish the Mortgage loan liability Account for the original amount of the loan (another self-transfer entry).  They can now track changes in the value of the house, pay downs of the mortgage loan, and track their mortgage interest expense, all without understanding a lick of accounting.  It's not perfect, but it's better than not really knowing much of anything at all about your finances.
    The self-transfer entry is frequently referred to as a "one-sided" entry, but it's not, really.  The "offset" to a self-transfer is to your "Net Worth", an Account you can't see in Quicken and, indeed, might not even exist in Quicken other than as a calculation of Assets minus Liabilities.
    So, going back to that house example above, if you'd enter the Opening balance of the House Account at a selling price of say $800,000, and then immediately run a Net Worth report, you'd find you Net Worth had increased by $800,000.  But when you went and established the Mortgage loan liability Account of say $642,000, and then run a Net Worth report, you'd find your Net Worth had declined by the same amount.
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