[GNC] How to treat a sale which involves more accounts?

[Michael or Penny Novack]

You are correct, Flavio

Look, we on this help list are qualified to give advice how to use 
gnucash to do double entry bookkeeping, That does not mean we are 
qualified to give accounting advice. Some of us do have a reasonable 
amount of knowledge/experience, but as non-professionals, treat that 
with more than a grain of salt.

Collectibles and other fixed assets of this sort. Things that are NOT 
expected to depreciate in value.

If NOT in the business of dealing in this whatever, you still are 
supposed to declare as income any NET gain from the sale of such assets, 
but losses are deductible from gains only up to the amount of gains. 
However I believe the IRS has a category "collectibles" and if you have 
those of different sorts you can lump when calculating net gain. In 
other words, could use a loss in selling an instrument against the gain 
of selling say a painting. BUT --- get PROFESSIONAL advice on that.

OK ---- I would suggest under fixed assets an account "instruments" and 
when you purchase an instrument create a child account say "oboe1" which 
will be debited for the purchase price. That MAY be the only entry in 
that account until/unless sold. But I chose an oboe because perhaps this 
old oboe needed repair to pads and springs and a new reed. You would be 
allowed to enter those transactions adding to what the oboe cost << 
repairs needed later because you are playing it would be expenses, not 
additions to the basis >>

IF --- you later sold the oboe, you would have a SPLIT transaction, 
debiting cash, crediting "sale of instruments" (for the amount of the 
sale) and debiting "cost of instruments sold" and "oboe1" (for the total 
of oboe1). EXCEPT -- if you also were collecting antique sheet music or 
some other form of collectible probably"sale of collectibles" and "cost 
of collectibles sold".

Musical instruments not the only form of collectibles that might have 
initial repairs added to the original basis. Say an antique chair might 
be recaned, artwork cleaned or reframed, etc. But some forms of 
collectibles not, stamps, coins, etc. Again, this is the sort of thing 
for which you need professional advice. How much total value are we 
talking about? *

Michael D Novack

LOL --- back when I lived near Philadelphia the shofar blower at my 
synagogue was 2nd trumpet with the Philadelphia Philharmonic. His hobby 
was collecting folk instruments. On the Orchestra's trip to China, they 
were taken to some place out in the countryside to do a concert. 
Wandering the town's marketplace, he saw number of folk instruments for 
sale of sorts he had never seen before. Not expensive, so he bought some 
examples. When back home orchestra members were interviewed and when 
shown what he had brought back, a reporter unfortunately asked "what are 
they worth?"   "No idea, cost me very little" "Will have to ask"  It 
turned out that his "never seen before" was because these instruments 
were unknown in the US or Europe, no museum anywhere had examples. 
Sadly, that meant he couldn't afford the insurance to be able to keep 
them at home.




On 9/24/2024 4:26 PM, Boniforti Flavio wrote:
> Hi David.
>
> In fact I don't buy instruments with the goal of making profit out of them.
> I collect and play them too. In fact, for this situation I would simply
> account for both purchase and sale as you described.
>
> So there's no tax implication whatsoever in my case.
>
> But then...
>
> I look at my collection of instruments as an asset, not as an expense. I do
> own a bunch of vintage instruments, which have the value corresponding to
> what I've paid for them. So if I consider this collection to be an asset,
> then the suggested accounts you proposed won't work anymore (please correct
> me if I'm wrong).
> I was thinking more of something like this:
>
> PURCHASE:
> "Asset:Bank Account" decrease
> "Asset:Musical Instruments Collection" increase
>
> It becomes for me more difficult to understand how a sale would have to be
> registered, as it not only increases my bank account, but it also decreases
> the musical instruments collection - but only of the value I paid for it
> when I bought it. Given the fact that many items will increase their value
> over time, there might be a surplus. The easy example is: I bought item A
> in 2002 for 1000 and I sell it now in 2024 for 2000 --> my collection
> account would decrease by 1000, my bank account would increase by 2000 but
> where do I put the surplus? I thought of something like this:
>
> SALE:
> "Asset:Bank Account" increase +2000
> "Asset:Musical Instrument Collection" decrease -1000
> "Income:Musical Instrument Sales" increase +1000
>
> If the above is correct and feasible, how would I enter it in GC?
>
> F.
>
> https://www.instagram.com/boniforti_music
> https://soundcloud.com/boniforti_music
> https://bonny-j.bandcamp.com
>
>
> Am Di., 24. Sept. 2024 um 06:48 Uhr schrieb David Cousens <
> davidcousens49 at gmail.com>:
>