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Flat Purchase

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vidya shetty

senior accountant

105 Points Joined October 2008

Our Client has Purchased a new Flat against Loan. Both the Client and his Son jointly purchased the new flat. Whether 50% of the value of the flat is to be reflected in their balance sheet? If the payment is not made equally between them, Whether the value to be shown in balance sheet is equal to payment made? Also Loan repayment is made completely by father, in whose balance sheet the loan account should be reflected?

Also in case of Flat sale whether capital gain is to be divided equally between them irrespective of the sales consideration received by him?

Replies (1)

Vidya

Student

789 Points Joined December 2007

In case there is no specific agreement, the asset will be taken equally in both balance sheet. Even if payment is made in different proportion, you can still show equal share of property and create an obligation on one party to pay the other for difference. Else, they can share in the proportion of their investment. If there is a loan, and if the father repays is completely, the son has an obligation to repay the father.