[GNC] Asset accounts: cost, or value?

[D.]

Michael, 

Could you go into more detail about how one would enter, e.g., title insurance in GnuCash so that it would apply to the cost basis of a property? 

TIA,
David


-------- Original Message --------
From: Michael or Penny Novack <stepbystepfarm at comcast.net>
Sent: Wed Sep 02 09:53:54 EDT 2020
To: gnucash-user at gnucash.org
Subject: Re: [GNC] Asset accounts: cost, or value?

On 9/2/2020 8:28 AM, Marcus Winston wrote:
> OK, Thanks. So the "balance" in the asset account would reflect the 
> cost of the asset, not its value. That's fine, and is what I concluded 
> also.
>
> Next question: When I sell the house, I'm adding the costs to sell the 
> house (title insurance, reconveyance fees, etc) to the cost of the 
> house itself. In other words, this will increase the bottom line on 
> the fixed asset "House" account. For two-column accounting, where does 
> that money come from (what's the other account)? I tried using an 
> equity account, but then I end up with a positive equity value on the 
> house after I sell it, and that doesn't make sense (I think I should 
> have zero equity in the house once it's sold).
>
> MW

This isn't a gnucash question per se (you would have exactly the same 
question were we back in the days of pen and ink on paper accounting)

When these transactions occurred you may have entered them wrongly << 
BTW, maybe it is being in different jurisdictions, but you are listing 
things like "title insurance" and "conveyance fees" as SELLER costs. In 
my experience, it is the buyer who pays for those particular things. >>

But back to the other side of those transactions. What I suspect is that 
you entered them incorrectly with the other side as expenses, not 
changes to the basis.

Michael D Novack


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