[GNC] Example of accounts for a personal residence with entries for US tax basis

[Michael or Penny Novack]

On 7/12/2022 9:01 AM, Derek Atkins wrote:
> The way I do it personally (note: IANAA) is that I have an Assets:Fixed
> Assets:<House Address> account with subaccounts for, e.g. Purchase,
> Renovations, etc.
>
> That way I account for improvements that change the basis, and the summed
> balance of A:FA:<HA> is my current basis.
>
> -derek

This is very much not a gnucash question per se. Or rather the gnucash 
part of it rather simple, just make "basis" a parent with two children, 
one for the original acquisition basis and one for later "improvements".

BUT --- you need to know WHAT is allowed for each of these according to 
IRS rules. The first part, "acquisition basis" is relatively simple and 
probably already done long go. It's the second that is not so simple. 
Not beyond the examples the IRS will use. In other words, what counts as 
"improvements" which you can add to the basis and what is considered 
"general maintenance" and you cannot add to the basis. Thus .....

With the understanding that I a NOT "qualified" to give such advice

Adding an addition or a garage -- obviously yes, add to basis

Having the roof reshingled  or the house repainted-- I think so, but 
best look up

Replacing the carpeting -- I think not, but best to look up.

Etc.

Michael D Novack

PS: If it is actually a different question you are asking along these 
lines: "I want to show, in our personal expenses, the cost of 
"improvements" that are allowed to be added to the basis << I want BOTH 
accounts debited >> what does the transaction look like?"

In THAT case, you can do either two transactions or a two way split 
transaction, with the basis adjustment part a "journal transaction" 
(equity is the other side)