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Property Sale Help...Transfers or not when entering?

Lefebvres090428

I have seen all over how to enter the sale and split it off to record the sale. I am a little confused on if I should be using transfers or the "credit" "debit" people are mentioning.

I have a cost basis at 656k sale at 775k. Fees paid at 41k. 585k on a loan that was paid off. 149K paid cash to us into our checking account.

quicken had an asset account (5 Alexander Way) that was setup to track the cost basis. There was a loan account (mortgage) set up to track the loan. and a checking account Please could I get some help in how to enter this transaction in the checking account? I have been trying to do it using transfer [account] for category then selecting the account in the transfer drop down. The plus and minus seems to be the issue. where I want to enter a plus it then brings the other account in the wrong direction. Seems both are never happy if that makes sense. see below.

Thank you

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volvogirl

Your gain is only sales price 775,000 minus fees -41,019 - cost/basis 656,750 = 77,231 profit. The mortgage or net proceeds doesn't figure into it. I am having trouble using your amounts. Then minus the mortgage 585,238.80 = 148,752.20 proceeds. Which is close to your 149,014.10 deposit. Which could be for interest.

Lefebvres090428

Thank you for responding. That is what I am trying to figure out why it is not working because it doesn't make sense to me. I think the difference is there was a rebate of 261.90 for city taxes which would be the 148752.2 plus the rebate equals 149014.10.

Jon

OK, first off your cost basis doesn't matter here, you should be entering the sale price instead. You also need to include the Property Tax rebate. This is what it should look like:

Screenshot 2023-07-28 at 11.34.53 PM.png

volvogirl

Actually the Transfer to the House (the 5 Alexander Way) account should be the same as the balance in that account to zero it out. Is it $656,750.00? Then the difference of $118,250.00 is the gain and should be income.

Jon

If you want to show the cost basis and increase in value of the house, I would do that in the asset account for the house instead:

Screenshot 2023-07-28 at 11.58.11 PM.png

Lefebvres090428

https://community.quicken.com/discussion/comment/20375710#Comment_20375710

Yes that is correct, the balance was the $656,750.00. the house was purchased for 629,900 then I used the asset account to add improvements and upgrades, closing costs, along the way to end up at the cost basis of the 656,750.00. Does the commission and fees of the 41,019 not bring down my income gain? Which is where I figure income should be 77,231 vs the 118,250 you calculated.

Lefebvres090428

The 77,231 is more like what I was expecting the income to be. In the original post it is at 36,473.95 and I thought that was off. I believe if I didn't enter the mortgage payoff in the original post picture I could get the income to show correct, the asset be zero and the fees and taxes to all show correct in reports. My question then is how should I show the payoff of the mortgage since I can't directly enter a transaction in to mortgage register other than a balance adjustment. I can transfer money to it since it is a loan account.

Sorry if I am a bit confusing, I do appreciate the help!

volvogirl

Yes your gain is 77,231 as I said in my first post. The mortgage and net proceeds don't figure into the gain or loss. Don't know why I said 118,250. It was getting confusing and late.

775,000-41,019-656,750

Lefebvres090428

https://community.quicken.com/discussion/comment/20375896#Comment_20375896

No problem and thank you for clarifying.

I have seen your post on entering a sale on here. posted below and I am trying to use it to make my transaction but have a question.

Screen Shot 2023-07-30 at 8.55.48 AM.png

I see exactly how these numbers work out above and I can get mine to work out like this as well. Using (estimates for ease) sale 775 minus 41 fees leaving 734 net proceeds. 585 loan payoff leaving 149 deposited as the left over cash. With my house asset account showing 656. leaving with 119 for the profit income. In discussing via previous posts I thought that the profit income would be the 775-41-656 =78. But calculating in the example you posted above I see 150-20-90=40. Same discrepancy as I am getting with my numbers. Is there any way to get the profit income category to reflect my actual income of the 78 vs reflecting 119 like it does when I enter it like your example above? Maybe that is not possible with the splits.

volvogirl

This post is good and might help

https://community.quicken.com/discussion/7921360/record-sale-and-purchase-of-primary-residence-with-mortgages

volvogirl

OK I entered your info into my test file. You don't enter the full 775,000 anywhere. You start in the checking account with the deposit of 149,014.10. That is the proceeds.

volvogirl

Not sure how to work the $41,019 fees paid into this. But it can be done. I'm going out now so I work be back until tonight.

volvogirl

yeah the fees should reduce the gain. So you need another category for sale expenses.

Reduce the Gain on Sale by 41k and add another category for sale expenses. That should do it. Ok?

Lefebvres090428

Thank you. The above file and the linked discussion helped greatly. I was also trying to figure the commission fees of 41k and after thinking about it the 149 that was deposited never had the fees into it, since they were already removed prior to the deposit, so that gain is correct at the calculated 77k. If I wanted to track the commission for a report then I would need to create the other expense I believe. If not I think it sits well as entered above.

Thank you again

volvogirl

Yes you can deduct some selling expenses from the 775,000 sales price so you should account for them. It will reduce your gain.

IRS pub 523 house sale. Figuring Gain or Loss on page 8.

http://www.irs.gov/pub/irs-pdf/p523.pdf