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
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