Adjusting for a Real Estate Sale

Dognose

What is the best practice for recording sale of an investment property?

I think it goes:

1. Make asset account manual (if connected with Zillow).
2. Wait for any escrowed money to hit to a cash account, then create a dummy transaction linking it to the asset account.
3. Zero out the asset account with a manual entry to account for transaction costs.
4. Close manual asset account in Simplifi.

Thoughts?

DryHeat

@Dognose

I recently sold an oil royalty (simpler than an actual land transaction) and I recorded it this way (amounts are fictitious to simplify things):

Assume $10k sale price, tax basis $3k, $1k transaction costs. Cash transaction into my account was $9k.

I had an asset account (call it OIL_PROP1) for the property with a total value of $3k (the cash basis). I don't bother to record appreciation in that account because I pay taxes on cash, not accrual.

So, here's how I split the incoming $9000 cash transaction:

Capital Gains = $+7000 (this is what I will be taxed on)

OIL_PROP1 = $+3000 (this is a transfer that zeros out the asset account)

Sales Expenses = $-1000 (this will be a tax deduction)

Total Transaction = $+9000 (the sum of the above splits)

The transaction with the OIL_PROP1 account isn't really a dummy. It represents the movement into the cash account of the invested cash basis that you put into that account when you purchased the asset (or whenever).

I don't know if that matches your needs, but it works for me.

Coach Natalie

@Dognose, thanks for posting your inquiry to the Community!

Our support article here goes over how to handle the selling of an asset in Quicken Simplifi: https://support.simplifi.quicken.com/en/articles/3469358-asset-tracking-in-quicken-simplifi#h_ffdc1fa255

Let us know how these steps work for you!