Re: [GNC] House renovation Expense or Asset?
Thanks all, good enough for me! Cheers On Sat, May 12, 2018 at 6:48 PM, R. Victor Klassen wrote: > Correct. And contrary to what others have said, it is more than a tax > issue. If you put home improvements in an expense account, then when you > look at your overall expenses and income at the end of the year, it will be > distorted (yes you’ve spent that, but it is an unusual expense). Having a > more realistic amount in the expenses makes forecasting easier. And that > is a not insignificant part of the reason to keep books in the first place, > is it not? > > > On May 12, 2018, at 1:20 AM, Tony Vanson wrote: > > > > Thank you for your responses. > > At this stage there are no taxation issues, such as capital gains, to > take > > into account as I'm living in S.E. Asia. I am just looking at a > simplified > > way of recording all expenses incurred in connection with the renovation. > > I have an asset parent account set up as "House" and a sub-account to > that > > as "Renovation". I also have an expense account as "Home Repair". My > > thoughts are that anything spent on Renovation adds to the asset and is > > technically not an expense to be recorded as Home Repair? Am I correct on > > this? > > Cheers > > > > On Sat, May 12, 2018 at 4:35 AM, Mike or Penny Novack < > > stepbystepf...@dialup4less.com> wrote: > > > >> On 5/11/2018 1:21 PM, Tony Vanson wrote: > >> > >> I assume that when all the construction is finished, the total cost > could > >>> be assumed to be treated as an asset increase to the value of the > house? > >>> In this instance, would all additional expenses occurring during > >>> construction be treated as a debit on my bank account but a credit as > an > >>> asset increase? > >>> I would really appreciate some advice from any of the many > knowledgeable > >>> users on this forum. > >>> > >>> Correct, with the caveat that while we are competent to tell you HOW to > >> do things using gnucash, and while many of us KNOW the the correct > answer, > >> we do not hold the qualifications to give accounting/tax advice of this > >> sort. At least I do not. > >> > >> Michael D Novack > >> > >> PS -- Do you understand WHY this is a tax issue? Again speaking as an > >> "amateur", living expenses are not deductible, maintenance expenses are > not > >> deductible, but capital improvement expenses eventually ARE (in effect) > >> deductible from the capital gain which may result when you sell the > house. > >> Raising the basis reduces the gain. > >> > >> -- > >> There is no possibility of social justice on a dead planet except the > >> equality of the grave. > >> > >> > >> ___ > >> gnucash-user mailing list > >> gnucash-user@gnucash.org > >> 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. > >> > > > > > > > > -- > > *Tony Vanson* > > > > *The older I get,* > > *the better I was* > > ___ > > gnucash-user mailing list > > gnucash-user@gnucash.org > > 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. > > -- *Tony Vanson* *The older I get,* *the better I was* ___ gnucash-user mailing list gnucash-user@gnucash.org 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.
Re: [GNC] House renovation Expense or Asset?
Correct. And contrary to what others have said, it is more than a tax issue. If you put home improvements in an expense account, then when you look at your overall expenses and income at the end of the year, it will be distorted (yes you’ve spent that, but it is an unusual expense). Having a more realistic amount in the expenses makes forecasting easier. And that is a not insignificant part of the reason to keep books in the first place, is it not? > On May 12, 2018, at 1:20 AM, Tony Vanson wrote: > > Thank you for your responses. > At this stage there are no taxation issues, such as capital gains, to take > into account as I'm living in S.E. Asia. I am just looking at a simplified > way of recording all expenses incurred in connection with the renovation. > I have an asset parent account set up as "House" and a sub-account to that > as "Renovation". I also have an expense account as "Home Repair". My > thoughts are that anything spent on Renovation adds to the asset and is > technically not an expense to be recorded as Home Repair? Am I correct on > this? > Cheers > > On Sat, May 12, 2018 at 4:35 AM, Mike or Penny Novack < > stepbystepf...@dialup4less.com> wrote: > >> On 5/11/2018 1:21 PM, Tony Vanson wrote: >> >> I assume that when all the construction is finished, the total cost could >>> be assumed to be treated as an asset increase to the value of the house? >>> In this instance, would all additional expenses occurring during >>> construction be treated as a debit on my bank account but a credit as an >>> asset increase? >>> I would really appreciate some advice from any of the many knowledgeable >>> users on this forum. >>> >>> Correct, with the caveat that while we are competent to tell you HOW to >> do things using gnucash, and while many of us KNOW the the correct answer, >> we do not hold the qualifications to give accounting/tax advice of this >> sort. At least I do not. >> >> Michael D Novack >> >> PS -- Do you understand WHY this is a tax issue? Again speaking as an >> "amateur", living expenses are not deductible, maintenance expenses are not >> deductible, but capital improvement expenses eventually ARE (in effect) >> deductible from the capital gain which may result when you sell the house. >> Raising the basis reduces the gain. >> >> -- >> There is no possibility of social justice on a dead planet except the >> equality of the grave. >> >> >> ___ >> gnucash-user mailing list >> gnucash-user@gnucash.org >> 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. >> > > > > -- > *Tony Vanson* > > *The older I get,* > *the better I was* > ___ > gnucash-user mailing list > gnucash-user@gnucash.org > 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. ___ gnucash-user mailing list gnucash-user@gnucash.org 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.
Re: [GNC] House renovation Expense or Asset?
Thank you for your responses. At this stage there are no taxation issues, such as capital gains, to take into account as I'm living in S.E. Asia. I am just looking at a simplified way of recording all expenses incurred in connection with the renovation. I have an asset parent account set up as "House" and a sub-account to that as "Renovation". I also have an expense account as "Home Repair". My thoughts are that anything spent on Renovation adds to the asset and is technically not an expense to be recorded as Home Repair? Am I correct on this? Cheers On Sat, May 12, 2018 at 4:35 AM, Mike or Penny Novack < stepbystepf...@dialup4less.com> wrote: > On 5/11/2018 1:21 PM, Tony Vanson wrote: > > I assume that when all the construction is finished, the total cost could >> be assumed to be treated as an asset increase to the value of the house? >> In this instance, would all additional expenses occurring during >> construction be treated as a debit on my bank account but a credit as an >> asset increase? >> I would really appreciate some advice from any of the many knowledgeable >> users on this forum. >> >> Correct, with the caveat that while we are competent to tell you HOW to > do things using gnucash, and while many of us KNOW the the correct answer, > we do not hold the qualifications to give accounting/tax advice of this > sort. At least I do not. > > Michael D Novack > > PS -- Do you understand WHY this is a tax issue? Again speaking as an > "amateur", living expenses are not deductible, maintenance expenses are not > deductible, but capital improvement expenses eventually ARE (in effect) > deductible from the capital gain which may result when you sell the house. > Raising the basis reduces the gain. > > -- > There is no possibility of social justice on a dead planet except the > equality of the grave. > > > ___ > gnucash-user mailing list > gnucash-user@gnucash.org > 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. > -- *Tony Vanson* *The older I get,* *the better I was* ___ gnucash-user mailing list gnucash-user@gnucash.org 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.
Re: [GNC] House renovation Expense or Asset?
On 5/11/2018 1:21 PM, Tony Vanson wrote: I assume that when all the construction is finished, the total cost could be assumed to be treated as an asset increase to the value of the house? In this instance, would all additional expenses occurring during construction be treated as a debit on my bank account but a credit as an asset increase? I would really appreciate some advice from any of the many knowledgeable users on this forum. Correct, with the caveat that while we are competent to tell you HOW to do things using gnucash, and while many of us KNOW the the correct answer, we do not hold the qualifications to give accounting/tax advice of this sort. At least I do not. Michael D Novack PS -- Do you understand WHY this is a tax issue? Again speaking as an "amateur", living expenses are not deductible, maintenance expenses are not deductible, but capital improvement expenses eventually ARE (in effect) deductible from the capital gain which may result when you sell the house. Raising the basis reduces the gain. -- There is no possibility of social justice on a dead planet except the equality of the grave. ___ gnucash-user mailing list gnucash-user@gnucash.org 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.
Re: [GNC] House renovation Expense or Asset?
All improvements to the house are collected and added to the purchase price when selling the house to reduce the capital gains on the sale. Gary -Original Message- From: gnucash-user [mailto:gnucash-user-bounces+diamondhranchqh=earthlink@gnucash.org] On Behalf Of Tony Vanson Sent: Friday, May 11, 2018 1:21 PM To: David T. via gnucash-user Subject: [GNC] House renovation Expense or Asset? Hopefully I've posted this query in the right area - if not, please accept my apologies. My quandary is that, my recently purchased house, has an uncompleted extension. I have now contracted to have this extension finished. I am unsure how to record the expenses incurred in GNUcash. I assume that when all the construction is finished, the total cost could be assumed to be treated as an asset increase to the value of the house? In this instance, would all additional expenses occurring during construction be treated as a debit on my bank account but a credit as an asset increase? I would really appreciate some advice from any of the many knowledgeable users on this forum. Cheers -- *Tony Vanson* *The older I get,* *the better I was* ___ gnucash-user mailing list gnucash-user@gnucash.org 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. ___ gnucash-user mailing list gnucash-user@gnucash.org 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.
Re: [GNC] House renovation Expense or Asset?
> On May 11, 2018, at 10:21 AM, Tony Vanson wrote:
>
> Hopefully I've posted this query in the right area - if not, please accept
> my apologies.
>
> My quandary is that, my recently purchased house, has an uncompleted
> extension. I have now contracted to have this extension finished. I am
> unsure how to record the expenses incurred in GNUcash.
> I assume that when all the construction is finished, the total cost could
> be assumed to be treated as an asset increase to the value of the house?
> In this instance, would all additional expenses occurring during
> construction be treated as a debit on my bank account but a credit as an
> asset increase?
> I would really appreciate some advice from any of the many knowledgeable
> users on this forum.
> Cheers
The following is free advice from a non-professional and you get what you pay
for. If the value is large then it's worth the cost to get professional advice.
As a general rule improvements like an addition are treated as an increase in
asset value ("capitalized"), while maintenance like repainting or replacing a
fixture with a like one is expensed. While in general the distinction doesn't
matter for personal property, if this house is or will be your primary
residence and it's in the US you get a tax benefit in reduced capital gains tax
when you sell if you add the improvement cost to your basis. On the other hand
if the house is to be a rental then it's a business situation and you want to
expense as much as possible for an immediate deduction (and naturally the tax
folks have rules to stop you from doing that) rather than to adjust the basis
and depreciate it.
Regards,
John Ralls
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[GNC] House renovation Expense or Asset?
Hopefully I've posted this query in the right area - if not, please accept my apologies. My quandary is that, my recently purchased house, has an uncompleted extension. I have now contracted to have this extension finished. I am unsure how to record the expenses incurred in GNUcash. I assume that when all the construction is finished, the total cost could be assumed to be treated as an asset increase to the value of the house? In this instance, would all additional expenses occurring during construction be treated as a debit on my bank account but a credit as an asset increase? I would really appreciate some advice from any of the many knowledgeable users on this forum. Cheers -- *Tony Vanson* *The older I get,* *the better I was* ___ gnucash-user mailing list gnucash-user@gnucash.org 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.
