[GNC] How to Properly Record Valuation Changes in Home Value?

[Michael or Penny Novack]

On 9/15/2025 9:39 PM, Christopher Lam wrote:
> I can offer yet another opinion...
>
> I wouldn't record unrealised gains as Equity transfers.  A house purchased
> for $40k in 1976 would enjoy increasing values via period transfers from
> equity; and if the up-to-date valuation is $800k, and you sell today,
> you'll be recording a negligible capital gain. It is in my view that
> appreciating assets are best recorded as purchase price and left alone
> until the sale, then a large capital gain is recorded as income.

If you look at what I suggested, it was NOT to make these adjustments to 
the basis itself but to a sibling account of basis. Basis remains 
available for figuring capital gains. Do note that basis does not 
necessarily remain constant though. Routine maintenance would be current 
expenses but you are allowed to add to basis certain major repairs and 
certainly improvements. Consult your tax advisor.

Michael D Novack