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Did You Know...
Family Law Software can calculate child support guideline amounts in 21 states.
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Question: How are Real Estate Sale Proceeds Reflected?
Answer: When a home is sold it shows up only on the Net Worth and Summary Totals spreadsheets. (Otherwise, the large income number would distort the cash flow picture.)
When you look at the Net Worth or Summary Totals spreadsheet, you will see an asset shifting from the Real Estate Property column into the Accumulated Savings column.
Also, of course, if there are federal taxes to be paid on the sale, they show up as federal taxes on the View/Edit Taxes report.
So Real Estate becomes Accumulated Savings. Assets in the Accumulated Savings account are then automatically reinvested in a hypothetical diversified portfolio.
The income from that portfolio is taxed appropriately, and that portfolio appreciates at the rates specified.
You can see the allocation and rates of return on the Assumptions screen.
The software does not allow you to specify more precisely where the proceeds are invested, in part because this would significantly add to the complexity of the data entries.
Sometimes a party purchases another property with the proceeds of the sale.
What you do is to enter a new Real Estate property, and, at the top of the screen, and answer "no" to the question as to whether a party owns the property and lives here now.
You enter the cost and mortgage for the new property.
The software calculates the downpayment as the difference between cost and mortgage.
The downpayment is pulled from the Accumulated Savings account.
Thus, the net proceeds from the sale are deposited into the Accumulated Savings account. And the downpayment for the new property is pulled out of the Accumulated Savings account.
And so the software automatically handles the cash flows when the proceeds of the original real estate property are used to purchase a new one.
You can see the details of these cash flows on the Accumulated Savings report on the Financial tab > Reports screen.