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Based on Rustler's comments* on how to sell a property on Quickbooks, I have done the following. Just want to make sure I did not do this incorrectly.
(*https://quickbooks.intuit.com/learn-support/en-us/reports-and-accounting/how-do-i-record-a-sale-of-a... and https://quickbooks.intuit.com/learn-support/en-us/reports-and-accounting/recording-the-sale-of-a-pro...).
My main concerns at present:
The gap below has no meaning.
Credit (Type = Account: Subaccount) | Debit (Type = Account: Subaccount) | Description | Amount |
Income = Gain/Loss on Property | Fixed Asset= Property: Accumulated Depreciation | Sum of all previous depreciation on property | $52,055.89 |
Income = Gain/Loss on Property | Fixed Asset= Property: Building | Original value of property when purchased | $194,900.00 |
Income = Gain/Loss on Property | Fixed Asset= Property: Improvements | Value of depreciable improvements made to property | $35,107.21 |
Income = Gain/Loss on Property | Fixed Asset= Property: Land | Original value of non-depreciable land | $50,000 |
Income = Gain/Loss on Property | Fixed Asset= Property: Purchase Expenses | Original costs associated with purchasing property | $915 |
Bank = Checking Account | Income = Gain/Loss on Property | Sales price (minus seller credits to buyer) | $280,800.00 |
Long Term Liability = Property mortgage | Bank = Checking Account | Balance on mortgage paid at closing | $160,533.56 |
Bank = Escrow | Bank = Checking Account | Cost of closing for sale (real estate commission, attorney fee, wire/courier/recording fees, conveyance tax, state tax) | $18,582.50 |
Income = Gain/Loss on Property | Bank = Escrow | Closing costs as above | $18,582.50 |
1. It IS correct that the mortgage paypoff has no bearing on gain or loss. You are reducing the liability that was incurred when purchased and think back, the loan was not income and principal over the years was not expense.
2. Yes and no. Original purchase price plus closing costs was you book asset. You may have taken depreciation, which reduced current asset value but there is recapture of the depreciation to get back to book value
3. Form 4797 sale of business property along with Schedule D capital gain/loss will be next
Thank you, friend!
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