Record sale and purchase of primary residence, with mortgages

ccastoro1340

What's the best way to collect all the information on the closing documents into my Quicken?

Tom Young

To some extent your accounting in Quicken depends on how you've got things set up in Quicken.

It's not clear if you're asking about how to identify and collect information off the closing documents themselves or if you're asking about entries to make in Quicken.

Assuming a simple possible set of realistic circumstances:

1. You've got a house asset Account with a cost of $300,000
2. You've got a mortgage liability Account with a balance of $100,000
3. You've been accounting for property taxes in a Property Taxes Category
4. You've sold your house for a selling price of $675,000
   
5. Selling commissions and fees amounted to $17,900
6. The buyer paid you $620 as their portion of the pro-ration of property taxes

that would result in a net deposit into your checking account of $675,000 - $17,900 - $100,000 + $620 = $557,720.  The gain on sale is $675,000 - $17,900 - $300,000 = $357,100. 

You could account for all this with one "split" entry in your checking Account as follows:

Debit (increase) Checking Account         $557,720   (net cash deposited)
Debit (decrease) Mortgage Account       $100,000    (zero out mortgage)
Credit (decrease) House Account           $300,000    (zero out house)
Credit (decrease) Prop Tax Category     $       620    (record property tax refund)

Credit (increase) Gain on Sale Category $357,100   (record gain)

It would end up looking like this:

You could do the exact same thing in reverse with a new house purchase.  Of course Quicken has its own approach to setting up assets and mortgage loans, using what are commonly referred to as "one sided entries" to set up the asset and liability, (they're not, in a true accounting sense), but you can work around this is several different ways.