I'm confused about how to enter transactions that I want on two different reports. For instance, I had my driveway replaced. That should show up both in checkbook (i.e., income/expense report) AND in the home improvements account where it finds its way to my net worth report. I'm hung up trying to figure where to enter the transaction and what its category should be. Can some one set me straight on this? TIA
You can customize your reports to include any categories or accounts you want. Just categorize the tranaction so it will be included in the reports you want.
The transaction in your checking account should be a transfer to the asset account, not allocated to Home Imp.
Hi, Stubby.
Your driveway replacement question falls squarely into one of the grayest of the gray areas in accounting: "Repairs" versus "Improvements". :^{
The theory is clear enough: If the project adds something new and valuable to your property, then it is an Improvement and the expenditure should be added to your property's cost in your books. If the replacement simply brought the property back to its original condition, then it is a Repair, or Maintenance.
But from that clear theory, Real Life takes many twists and turns and we often must be clairvoyant to choose which expenditures belong in an Asset Account (such as Residence) and which should be in an Expense Category (such as Driveway Repair Expenses). And a single expenditure must sometimes be allocated between them.
If all you did was remove the old driveway and construct a new one to essentially the same specifications, then the entire expense was a repair of your property, restoring it to its original state and repairing wear and tear sustained over the years since you acquired the property.
If you removed a thin, narrow driveway and replaced it with a thick, wide driveway with a lot of extra strength and capacity, then you should "capitalize" the cost and add it to what you paid for the property originally. Of course, you should also try to determine how much of that original cost was for the original driveway and deduct that cost from your purchase price - and that is not always as easy in practice as in theory.
If you did not acquire the property when it was new, and if the driveway already had cracks when you bought the place, then the calculations might get even more complex - but we've gone deep enough for today.
As stated so often here, DO NOT confuse Cash Flow with Income/Expense. Many checkbook transactions don't affect income or expense at all, such as when we borrow money or pay it back. Or when we buy a new car or other asset.
Once you've decided whether the driveway replacement is a Repair or an Improvement, your accounting choice should be self-evident. In either case, the entry should be in your checkbook - your Bank Account in Quicken terms. If it was a repair, then charge it to a Category, such as Driveway Repair Expense; this will affect your personal Income/Expense Report for the year. If it was an Improvement, then add it to your Residence Property Account - an Asset Account in Quicken-speak; this will not affect income or expense, but will add to your Net Worth (net of any amount you remove for the cost of the old driveway).
All I know is the theory, Stubby. I can't help with the facts of your case. :^{
RC
In New Jersey, the state taxation department would describe that as an "exempt capital improvement" as outlined on page 2 in the following:
You may be technically correct but contractors and homeowners in NJ like to call it a capital improvement so as to avoid paying the 7% sales tax.
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