Yup, I understand why those things could be confusing…let me explain:

- With the mortgage (interest) payments, my lender requires that I escrow one year of mortgage payments at the time of closing. In other words, at closing for this property, I paid an extra $3780 that went right into an escrow account, and my monthly mortgage payments were pulled from that account each month (i.e., the money was still mine until the mortgage payments were due each month). While this shows up as a credit under “Purchase Costs,” note that it also shows up as a debit as part of the $11,673.28 that I paid at closing. In other words, had I not had to pay this money into escrow, the $3780 credit wouldn’t be there *AND* the total amount paid at closing would have been reduced by $3780. So, you can see that this actually evens out under the “Purchase Costs” line items, as if this money wasn’t even paid.

- So, you might ask, where is the line item for the money they *did* take from me for mortgage payments? If you look under “Holding Costs,” you’ll see a line item for mortgage payments with a total of $222.75. This was one month’s mortgage interest payment that was taken directly from the escrow account before I sold the property.

- Now, if you add the $3870 that I paid at closing into escrow and the -$222.75 they took out for mortgage payments, the balance ($3647.25) was returned to me after the closing.

Does that make sense? I know it’s confusing, and to be honest, when I first tried to figure out how to account for it, it took a few minutes to wrap my head around. But, if you can imagine that money actually moving from the closing table to an escrow account, having the monthly payments deducted and then the balance coming back to me later, it should make sense.

As for the commissions, yes, my wife is a realtor and therefore got a commission on both ends. Keep in mind that the purchase commission actually came from the bank (the seller of the property when we bought it), so that was money we really earned.

But, the $3600 that shows up as the “Commission on Sale” is actually just an accounting detail. The credit you see is the commission I paid my wife on the sale, but it reduced my total income on the sale as well by the same amount (note the -$3600 paid to agents under “Selling Costs”). So, we didn’t really earn an extra $3600…it’s just accounted for as a commission profit instead of an increased sale profit. We do this for tax reasons — it’s easier for my wife to take deductions for her real estate work if she has income.

Btw, it would have been just as easy to not pay her a commission, in which case, the line item “Commission to Agents” would have been $0 and “Commission on Sale” would have been $0 as well. Same result for the net profit, but my CPA would have complained that my wife didn’t show any income as an agent.

Does that make sense?