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Comment by throwaway1105q | Hacker News Reader

Not sure how is an accounting book relevant. I'd rather ask a tax consultant - the definitions are slightly but significantly different.

Anyways, even by your book's definition - later sale for a higher price is economic benefit, protection against inflation is one too.

This link considers your viewpoint too: https://www.investopedia.com/terms/a/asset.asp

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I’m trying to say that under mortgage, a property isn’t your asset. It’s a bank’s asset. The mortgage is booked under asset side on the balance sheet of the bank. It cannot be booked as an asset on your side. The economy wouldn’t balance. Until you actually paid off stuff the home is a liability. You pay money on it every month (negative cash flow) and that cash flow accrues to the bank (positive cash flow). I don’t know in what definition an asset produces a negative cash flow. It’s a liability under most definitions. Maybe I’m wrong. I’m not an accountant.

> I’m trying to say that under mortgage, a property isn’t your asset. It’s a bank’s asset.

No, the property is your asset. The mortgage is your liability. Each month as you pay the mortgage you have an expense (the interest part of the mortgage) and a reduction in your liability.

The loan is a liability (and an asset on the bank's side) but the house itself is your asset and is treated as such. You pay capital gains tax on sold assets even if you used a loan to obtain them. For individuals there are exceptions to that specific to real estate, but corporations definitely do. It's not an asset only if it's actually owned by the bank - such as a car or machine on leasing.

I'm not an accountant either but my company has some assets we paid for with a loan, so this is a situation I know.

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