For a property disposal, an SMSF may receive settlement proceeds in instalments. How can this be accounted for?
Example: The sale of a property held by an SMSF took place on 01 Dec 2019 at $100,000. $90,000 was to be received on 01 Jan 2020, with the remaining balance to be received by 01 Feb 2020. $3,000 was incurred as a conveyancing fee to be taken from settlement proceeds.
1. To record the first receipt on 01 Jan 2020.
|Dr. 77200/Rental Property (unit:0)||$3,000|
|Dr. 94910/ Investment Movement Data Clearing||$7,000|
|Cr. 77200/Rental Property (unit:1)||$100,000|
a. $3,000 is recorded as a cost base adjustment, thus the unit is entered as "0".
b. $100,000 is recorded for the disposal of the property, thus the unit is entered as "1".
d. BGL does Not provide tax advice. Other accounting treatments may also suit.
2. To record the remaining balance received on 01 Feb 2020.
|Cr. 94910/ Investment Movement Data Clearing||$7,000|
This also offsets the clearing account or other custom accounts.
Please also refer to how to process rental property transactions