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Closing Costs

Shizzle5985Shizzle5985 Member Posts: 1

Hi Folks,

I'm new to all this, so please bear with my question. I have just closed on a house, and I'm wondering how to record the journal transaction for said closing. The house was paid for in cash, so I'm guessing this make things a bit easier.

My main question is, as follows. The seller paid a pro-rated amount of the property taxes that were due at the time of closing. Thus, the final amount we had to pay for the home was net said property taxes. For example, if the home was 100k and the taxes were 2k, we ended up having to pay 98k.

In any case, where do I account for those taxes paid by the seller? Or, do I not account for them at all, and instead of using a journal transaction where the home price is 100k, do I instead set the home price to be 98k?

Thanks for any help on this!
Sam

in Accounting Technical Support

Comments

  • MikegMikeg Member Posts: 995 ✭✭✭

    Shizzle5985,
    Items paid for by the seller do not go into the basis (cost) of the asset for the business.
    Mike G, CPA
    www.mgfinancial.net

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