How to enter a property sale in REI Hub
This article details how to create a journal entry for a recent property sale and enter it into REI Hub. Manual Journals are used for property purchases, sales, and refinances as these are all complicated transactions touching multiple accounts, and so cannot be templatized to the same degree as simple income or expense transactions.
To make a property sale journal entry:
1) Open a Manual Journal transaction
2) Fill out the base information
Enter the closing date and appropriate property. Add a description of your choosing, such as 'Property Sale Journal.'
3) Enter the debit lines
The Debit lines will be:
- Your bank account receiving funds and the amount of those funds. Owner Funds could be used alternatively if you are not tracking sale proceeds into your bank account.
- The loan account and the amount of loan payoff (assuming the property is financed). This should zero out the loan account.
- Accumulated Depreciation in the amount of depreciation taken to date - this should zero out the Accumulated Depreciation account.
- NB: If you have not been tracking fixed assets, property basis, and depreciation in REI Hub, you will omit this line.
- Expenses incurred in the sale process. These will be entered with the specific expense account (eg Insurance) and the amount, which will flow through to your Schedule E/ PnL and be deducted against income in the same year.
4) Enter the credit lines
The credit lines will be:
- A line for each fixed asset accounts (e.g Land, Buildings, Capital Improvements, etc) and the required amount to zero them out.
- Gain on sale - the effective sale price less the book value of assets.
- A line for any prepaid expenses (for example, if you paid the tax bill for the whole year before selling - you will get prorated credit for that
- Autobalance in the same amount as the debit half of the journal, to ensure the transaction balances.
5) Save the journal entry