[GNC] A question on loans

[Michael or Penny Novack]

On 11/20/2019 1:13 PM, Mark Phillips wrote:
> A PS to my last email about the mortgage accounts. My gnucash accounts are
> for my financial tracking purposes only. My accountant gets bank statements
> and other original documents for tax purposes. He has nothing to do with my
> gnucash accounts, and is not interested in seeing them.
>
> Just in case my earlier email sounded like I was laundering money or doing
> something to cheat the IRS! Or, maybe I have been watching too many
> episodes of the Black List....

These are no (actually) gnucash questions as you would have exactly the 
same questions were you using old fashioned pen and ink on paper.

Add the proviso that I am NOT qualified as an accountant (but do know 
some things)

You were told "enter the building at its current value". That is wrong. 
You enter the BASIS (what you paid for it) plus any expenditures that 
qualify as CAPITAL IMPROVEMENTS (consult your accountant -- but I think 
you will find things like new heating system, new roof, etc. ). The 
reason for this is that if/when you dispose of this asset, hopefully for 
a profit, the amount of CAPITAL GAIN will be clear (taxed at a different 
rate than ordinary income).

The loan you enter at its current balance.

The opposite side of these transactions would be equity. When opening 
new books you can have a whole bunch of individual transactions, or two 
(big) splits, one for equity debits and one for equity credits, or one 
giant split on both sides (I do NOT recommend this if inexperienced with 
gnucash, OR you can use the "starting balance" feature (but I never do 
that).

Michael D Novack