Tracking Primary Residences

[Leo Bolta]

Excellent!  I'll try tracking the property with periodic valuations in on a
"off books" set of books as you suggest.  Question: I assume that I'll still
need to enter an "Opening Balance" of the property in my standard booking
system, and so by what calculation shall I enter that value?  Shall I enter
the opening balance with an estimate of it's "effective book value" of when
I started GnuCash, which is about 6 months ago OR shall I go back about 6
years and enter an estimate of it's original purchase price, tallied
together with premove-in upgrades and closing costs?

Leo 

-----Original Message-----
From: gnucash-user
[mailto:gnucash-user-bounces+lbolta=rogers.com at gnucash.org] On Behalf Of
Mike or Penny Novack
Sent: June-25-17 3:37 PM
To: gnucash-user at gnucash.org
Subject: Re: Tracking Primary Residences

On 6/25/2017 2:18 PM, Leo Bolta wrote:

> Why to track a primary residence may not make sense to an accountant 
> but everyone's situation may be different.  For example, one may live 
> in a peak demand area and it may one day prove to be a timely decision 
> to moving into less popular area, where prices are not so hyped and 
> geared more towards a lifestyle that one may prefer.  I acknowledged 
> in my email, that it was not a standard practice to track primary 
> residence, but I don't necessarily follow standards and was hoping to 
> get a reply from someone who may have thought a similar situation through.

The purpose of accounting is to provide financial information (including for
decision making) so something like this CAN make sense. So let's look at the
alternatives. It appears that a great deal of your "effective" net worth (as
opposed to "book" net worth) would be the capital appreciation of this
property. How can you track that? << an aside here --- this sort of thing
might in fact be very important and in BOTH directions and it most certainly
affects "estate planning" where you might have to know if the value of the
estate will be above some tax threshold or special probate requirements. >>

Your confusion is in assuming that has to all be done in one set of gnucash
books. Gnucash will let you keep several sets of books. You can also combine
information form gnucash with information from other methods.

Might I suggest a set of books under gnucash that would be standard. 
That would give your net worth EXCLUDING the possible eventual gain on the
property. Then you could have an "off books" set of books (using gnucash or
whatever*) to track JUST the eventual gain on this property. 
To obtain your "effective net worth" add the two.

Michael D Novack

ares, etc. >>

* In this case, I personally wouldn't bother using gnucash for this, since
likely only an annually adjusted figure and an estimate in any case. But I
personally do use gnucash for some "off books" accounting when has enough
transactions to make an actual accounting application useful. Example: I
have a home solar system. Treated as an "investment", how is it performing?
<< the "entity" borrowed funds from us. It has income from sources like
transfer of credits to our personal electric bill, sale of SRECs, tax
credits against our personal taxes, etc. It has expenses like depreciation,
imputed portion of insurance cost and tax cost, interest on the loan
balance, etc. and from profit makes payments against the loan principle ---
QUESTIONS: IS this virtual entity able to pay off the loan at the assumed
rate of interest during the lifetime of the system? Will it even be able to
make "dividend payments" once the loan has been paid off >>


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