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. It seems to me sensible to have the properties in Assets*, and the expected Sales Fees / Taxes in Liabilities*. Then when a property is sold, both assets and liabilities are reduced by the expected values, and the differences between the expected and actual values are booked as Income or Expense (Net gain / loss on land sales?). This approach makes the Balance Sheet reasonable every year, but the Income Statement only shows the adjustment, not the total funds in and out due to the sale. I've tried some alternatives too, but not having the properties as assets makes the Assets side of the balance sheet look silly, whereas not having the expected taxes / sales costs in Liabilities means that a sale triggers a huge, unexpected expense in the Income Statement without any corresponding income to cover it. Am I missing some cleverer way to do this? Is there a GAAP approach for this? Thanks for any suggestions, Paul *I know "real" books keep only the book values of these assets and tax liabilities, but as this is a person rather than a company, and the reports need to make sense to a non-business person, we use current market values in these accounts, and annually update the expectations. _______________________________________________ gnucash-user mailing list [email protected] To update your subscription preferences or to unsubscribe: https://lists.gnucash.org/mailman/listinfo/gnucash-user If you are using Nabble or Gmane, please see https://wiki.gnucash.org/wiki/Mailing_Lists for more information. ----- Please remember to CC this list on all your replies. You can do this by using Reply-To-List or Reply-All.
