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How should I record my home’s down payment and closing cost

LittleMasti

I recently purchased a new home and manually added both my mortgage account and the real estate asset. I’m unsure how to properly record the down payment and closing costs so that my monthly mortgage amount doesn’t change when I enter the original and current mortgage balances. I also tried looking for previous guidance in the app’s help resources but couldn’t find a clear answer.

I’m using a Mac.

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NotACPA

The down payment is typically recorded as a transfer to the Asset/Home account. It's part of what you paid for the property.

re: closing costs You need to look over the closing statement and determine, on a line by line basis, which lines are part of the purchase price, which are tax deductions and which should be transfers to asset accounts (such as any Escrow items).

And by "original and current mortgage balances" does that mean that you sold a prior home and bought this one? Please clarify.

LittleMasti

No, I did not sell any home.

Screenshot 2026-02-22 at 4.11.43 PM.png

LittleMasti

@NotACPA I found one of your old posts. Just following the steps.

https://community.quicken.com/discussion/comment/20139988#Comment_20139988

jacobs

@LittleMasti That's a post I wrote, not @NotACPA. But re-reading it all these years later, I think it still correctly lays out the options you have in tracking (or not) your home as an asset. The only thing which is out-of-date from that post is that Quicken Mac can now update a home's estimated value through integration with Zillow, a feature which was not available back in 2020.

So, the question is, what do you want to track in Quicken regarding your home? And which part are you having trouble in implementing?

NotACPA

@LittleMasti I agree with almost all of @jacobs prior post … except the last sentence.

If you might be selling this home at any point in the future, I'd think that you'd want to keep track of the cost basis of this home so that when it's time to sell you'll know how much of the sale price is basis and how much is increase. That also means that if you make capital improvements to the property, you'll want to track those also.

Capital Gains taxes apply to home also, unless you get the "rollover" exemption by buying another home for more money. And, it's just a whole lot easier to track that basis through-out your ownership of the home than when you're trying to do your taxes after that sale.

Just as it's easier to track your yearly taxable income and expenses through-out the year rather than the night of April 14th.

jacobs

@NotACPA I agree that tracking cost basis of a home can be appropriate and very useful for Quicken users. But I can't say that it's useful or necessary for everyone, though. The exclusion for capital gains on sale of a home is currently $500,000 for a married-filing-jointly couple, and people may be able to judge in advance whether that is even a remote possibility or not. (I believe that the rollover exemption you mentioned hasn't existed since the late 1990s; it's just a flat dollar amount nowadays, which can be used repeatedly on subsequent home sales.) If I buy a home as a 30 year-old for $500,000, and live there for decades, then my gain might exceed $500,000 by the time I sell. If I buy a much more expensive home as a 40 year-old for $2 million and live there for a while, my gain might exceed $500,000. But if I buy a home for a $350,000, or a home I expect to live in for only a limited number of years, I may be able to know with reasonable certainty that I won't have a $500,000 gain when I sell the house. And doing the extra work to track the cost basis of every home improvement might, therefore, not be worth the effort.

The problem is that Quicken — at least Quicken Mac — doesn't make it simple to track your cost basis in the home on an ongoing basis. If I purchase a new heat pump, or replace the roof on my house, for instance, those purchases increase my cost basis. But if I record those purchases as transfers to an asset account, then they are not visible as expenses — and I think most people find it more important to track such purchases as expenses than as assets. I want to be able to have my Quicken reports show me how much I'm spending for home renovations, because that allows me to do long-term financial planning for what I'll need to pull from retirement savings over time. So the solution, if I want to treat these expenses as both expenses and as increases to the cost basis of my home, is to enter those purchases twice: once as a regular expense in a checking or credit card account using a "Home Improvement" or similar category for my income and expense reports, and again in an asset account as uncategorized purchases just to track the increasing basis of my home. I can't spend cash, increase an expense, and increase an asset in a single transaction. (Another way to do this in a single transaction is a hack with splits: first split categorizes the purchase as a Home Improvement expense, second split is a Transfer for the same amount to the Home Asset account, and a third split is an Adjustment for a negative of the same amount, so cash is only debited once for the purchase.)

John_in_NC

https://community.quicken.com/discussion/comment/20539332#Comment_20539332

I could be off here, but if one were interested in tracking the basis of their home, couldn't he or she mark any related Capex transx (or anything else that would increase the basis) with a tag?

It's manual, yet simple. And a tag report would show what you have additionally put into the home.

jacobs

I could be off here, but if one were interested in tracking the basis of their home, couldn't he or she mark any related Capex transx (or anything else that would increase the basis) with a tag?

@John_in_NC Yup, that would probably be a much better approach than what I wrote! 😀 I use tags pretty minimally, and I sometimes don't think of a use like this.