[GNC] Accounting Question re Balance Sheet

[Michael or Penny Novack]

On 1/20/2022 2:55 PM, paul at kroitor.ca wrote:
> This isn't really a GnuCash question, but I thought I might ask you guys
> anyway as there's a broad variety of skills and experience here.
>
>   
>
> Situation: a relative owns a house on a six acre property, plus several
> adjacent properties she's collected over the years. Under Canadian tax
> rules, the house and some of the lot it's on are tax exempt. The other
> properties are taxable for capital gains. They will be sold over the next
> years, one at a time to keep marginal rates down. There will also be
> significant sales expenses (commissions, surveyors, .) associated with each
> sale.
>
>   
>
> My question is about how to structure this tax and sales costs liabilities
> in the Chart of Accounts, and thus the balance sheet.

I do not know Canadian law/accounting practice. But here, with real 
Estate, some of the "expenses" you list would be additions to the 
"basis" and sale - basis would be the capital gain. This is significant 
because capital gains are taxed differently than current income.

You really need to consult a Canadian accountant, or if DYI, consult 
accounting texts that deal with Canadian real estate and taxes.

Michael D Novack