You will be using "Cash Accounting" principals as you complete your Accounting Report. For purposes of capturing gains and losses you will report acquisition and final disposition in the following categories:
Real Estate
Stocks and Bonds
Money owed to ~ki_ward_name~
Miscellaneous Property
Debts and Encumbrances
Cash and Cash Accounts
Acquisition Value of Property:
You will inform the court of the acquisition value of property. The value of that property remains the same in all of your future reports regardless of any actual increase or decrease until there is a final disposition of that property. A final disposition might be the sale of the property, destruction of the property, or some event that causes the value of the property to be zero, such as a stock being reduced to zero when a company the estate has invested in discharges all of its obligations in a Chapter 7 bankruptcy and goes out of business.
Disposition Value of Property:
At disposition, the value of an asset will be reported as zero. However, if the estate receives something in return for the asset, the money or other property which were received as payment will be reported at their acquisition value in one or more of the appropriate categories listed above.
Examples:
Home Sold for Acquisition Value: If a home originally acquired for $175,000 is sold for $100,000 cash and a $75,000 ten year mortgage contract then "Real Property" will be reduced by $175,000; "Cash and Cash Accounts" will be increased by $100,000 and "Money Owed To ~ki_ward_name~ will be increased by $75,000. Because the home was sold for exactly the original acquisition value, there is no overall gain or loss to the estate."
Home Sold for a Gain: Had the same home originally acquired for $175,000 been sold for $200,000 cash, there would be a decrease in "Real Property" of $175,000 and an increase in Cash and Cash Accounts of $200,000. This would have resulted in an overall gain of $25,000 to the estate (+$200,000 -$175,000 = +$25,000).
Home Sold for a Loss: Had the same home originally acquired for $175,000 been sold for $50,000 cash and the trade of a smaller house worth $100,000, then there would have been an overall decrease in "Real Property" of $75,000 (-$175,000 +$100,000 = $-75,000.) and a gain in "Cash and Cash Accounts" of $50,000. This would have resulted in an overall loss to the estate of $25,000 (+$100,000 +$50,000 -$175,000 = -$25,000).