When you will record the selling of your house in GnuCash you have some different options. Here we
will go through two of them, one in which you only recorded the purchase amount, and now the
selling amount. The other where you have followed the ups and downs on the property market and
registered various Unrealized gains over the time.
In this way you only record the proper sale amount.
Let’s work through two samples of selling a house, one with a profit, and one with a loss. If you want to sell a car instead, just substitute the house account with a car account.
-Assets
-Fixed Assets
-House
-Current Assets
-Saving
-Income
-Capital Gains Long
-House
You bought a house for $300,000 once upon a time, and now managed to sell it for $600,000. How do you record this?
To record this you need to increase your Saving account with the $600,000, and decrease some other accounts with $600,000. The house account only contains $300,000 which is what you bought it for, so you move this amount to your Saving account. That means you are lacking $300,000. This amount you fetch from the Income:Capital Gains Long:House account. The split transaction you enter into your Saving account (Assets:Current Assets:Saving) should look like this.
Table 8.3. Selling an asset (house) with a profit
| Account | Increase | Decrease |
| Assets:Current Assets:Saving | $600,000 | |
| Assets:Fixed Assets:House | $300,000 | |
| Income:Capital Gains Long:House | $300,000 |
You bought a house for $300,000 once upon a time, but due to a newly created airport, could only sell it for $230,000. How do you record this?
To record this you need to increase your Saving account with the $230,000, and decrease some other accounts with $230,000. The house account contains $300,000 which is more than what you sold it for. So let’s move $230,000 of it to your Saving account. After this you have $70,000 remaining in your house account which needs to be removed. You move it to our Income:Capital Gains Long:House account, which will indicate a loss. The split transaction you enter into your house account (Assets:Fixed Assets:House) should look like this.
Table 8.4. Selling an asset (house) with a loss
| Account | Increase | Decrease |
| Assets:Fixed Assets:House | $300,000 | |
| Assets:Current Assets:Saving | $230,000 | |
| Income:Capital Gains Long:House | $70,000 |
In this example, we will touch a little on some more complicated accounting principles. For more details on this subject, please check Chapter 11, Capital Gains.
Here we will only touch on the case when you have accurately estimated the current value of your house. For the other cases (over-, and under-estimated), please check Chapter 11, Capital Gains.
-Assets
-Fixed Assets
-House
-Cost
-Unrealized Gain
-Current Assets
-Saving
-Income
-Realized Gain
-House
-Unrealized Gain
-House
You bought a house for $300,000 once upon a time, and over the years kept a close look on the market and updated your records with the estimated current value of your house. At the time you want to sell it, you have determined that the current market value is $600,000.
The difference between $600,000 (estimated market value) and $300,000 (purchase value) is the current Unrealized Gain value. Therefore you have a total of $300,000 in your Assets:Fixed Assets:House:Unrealized Gain account
How do you record this sell transaction?
To record this you need to increase your Saving account with the $600,000, and decrease some other accounts with $600,000. You must first change from unrealized gain to realized gain for your Income accounts. Lastly you need to transfer the full amounts from the Assets:Fixed Assets:House sub-accounts.
The transaction you enter into your Income:Realized Gain:House account should look like this.
Table 8.5. Selling an asset (house) with a profit
| Account | Increase | Decrease |
| Income:Realized Gain:House | $300,000 | |
| Income:Unrealized Gain:House | $300,000 |
The transaction you enter into your Assets:Current Assets:Saving account should look like this.
Table 8.6. Selling an asset (house) with a profit 2
| Account | Increase | Decrease |
| Assets:Current Assets:Saving | $600,000 | |
| Assets:Fixed Assets:House:Cost | $300,000 | |
| Assets:Fixed Assets:House:Unrealized Gain | $300,000 |
After having recorded these transactions you see that your House Asset have a value of 0, your Saving account have increased with $600,000, and lastly, the Income:Realized Gain have increased to $300,000.