On 6/25/2017 2:18 PM, Leo Bolta wrote:
Why to track a primary residence may not make sense to an accountant but
everyone's situation may be different. For example, one may live in a peak
demand area and it may one day prove to be a timely decision to moving into
less popular area, where prices are not so hyped and geared more towards a
lifestyle that one may prefer. I acknowledged in my email, that it was not
a standard practice to track primary residence, but I don't necessarily
follow standards and was hoping to get a reply from someone who may have
thought a similar situation through.
The purpose of accounting is to provide financial information (including
for decision making) so something like this CAN make sense. So let's
look at the alternatives. It appears that a great deal of your
"effective" net worth (as opposed to "book" net worth) would be the
capital appreciation of this property. How can you track that? << an
aside here --- this sort of thing might in fact be very important and in
BOTH directions and it most certainly affects "estate planning" where
you might have to know if the value of the estate will be above some tax
threshold or special probate requirements. >>
Your confusion is in assuming that has to all be done in one set of
gnucash books. Gnucash will let you keep several sets of books. You can
also combine information form gnucash with information from other methods.
Might I suggest a set of books under gnucash that would be standard.
That would give your net worth EXCLUDING the possible eventual gain on
the property. Then you could have an "off books" set of books (using
gnucash or whatever*) to track JUST the eventual gain on this property.
To obtain your "effective net worth" add the two.
Michael D Novack
ares, etc. >>
* In this case, I personally wouldn't bother using gnucash for this,
since likely only an annually adjusted figure and an estimate in any
case. But I personally do use gnucash for some "off books" accounting
when has enough transactions to make an actual accounting application
useful. Example: I have a home solar system. Treated as an "investment",
how is it performing? << the "entity" borrowed funds from us. It has
income from sources like transfer of credits to our personal electric
bill, sale of SRECs, tax credits against our personal taxes, etc. It has
expenses like depreciation, imputed portion of insurance cost and tax
cost, interest on the loan balance, etc. and from profit makes payments
against the loan principle --- QUESTIONS: IS this virtual entity able to
pay off the loan at the assumed rate of interest during the lifetime of
the system? Will it even be able to make "dividend payments" once the
loan has been paid off >>
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