Navigation:  Teller System > Transactions > Loan Transactions > Loan Transaction Codes > Tran Code 2510-06, Sale of Security with Taxes

Use this transaction if the collateral has been repossessed and sold for this loan, and you need to apply the sale price to the loan. This transaction is different from the regular Sale of Security transaction (tran code 2510-03) in that it also collects the tax amount involved with the collateral.

 

Note: Before running this transaction, make sure a valid General Ledger account is entered Sales Tax field on the GOLD Services > General Ledger > G/L Account By Loan Type screen. This is needed so the sales tax involved in the transaction will be properly credited to the correct G/L account.
 
This transaction performs a credit to the principal balance for the amount of the transaction.

 

See the following example of the Sale of Security (with taxes) transaction:

 

 

Note about Date 1 field: This field updates the Date of Sale field (FCSALD) (found on the Loans > Foreclosure, Repossession, and Judgment Information screen, Notices and Sale tab). You can change the name of this field in CIM GOLDTeller through the Functions > Administrator Options > Transaction Design screen, then editing the Field Name on the Field Properties screen.

 

The history description for this transaction is "Sale of Security."

 

This transaction does not check for CP2 eligibility.

 

The amount of this transaction also updates the Sale Amount field (FCSLOS) on the Loans > Foreclosure, Repossession and Judgment Information screen, Notices and Sale tab. If an amount already appears in that field, processing another Sale of Security transaction will add to that amount. The Sale Amount field totals the amount of all Sale of Security transactions run. This also applies to corrections, when the Sale Amount field will be reduced by the amount entered on the Sale of Security correction transaction.

 

Use the Sales Tax field on the transaction to enter the amount of the transaction going to sales tax for selling the collateral. You must have the appropriate G/L account set up on the GOLD Services > General Ledger > G/L Account By Loan Type screen in the Sales Tax field in order for the funds from the sales tax to be credited to the correct G/L account.

 

Scenario

 

Your institution repossessed a car that was collateral for a loan. The balance left on the loan was $1,000. The car was sold for $850.00, including tax of $100. For the Sale of Security with Taxes transaction in this scenario, you would:

 

1.Enter "850.00" in the Tran Amount field. That's the amount sold.

2.Enter the date the collateral was sold in the Date 1 field (remember to change it to Date of Sale).

3.Enter the amount of the check or cash for the sale amount and the taxes in the Cash In or Check In fields, depending on whether it was cash or a check used to pay for the car. If Check In, make sure to enter the check number used in the Check In Number field.

4.In the Sales Tax field, enter the amount paid toward sales tax. In this example, that amount is "100.00."

5.Click <Send> (or <Transmit>).

 

After the transaction is successfully run, the following takes place on the loan:

 

•The amount of principal is decreased by the transaction amount (sale amount). If the amount is enough to pay off the loan, the loan will be closed.

•The sales tax amount is credited to the G/L account specified in the Sales Tax field on the GOLD Services > General Ledger > G/L Account By Loan Type screen.

•See the Options box below for more information about how certain options may affect this transaction.

 

If this transaction closes the account due to pay off, the system assigns Special Comments code AX (Account paid by collateral) to the account for Credit Reporting purposes. See the Special Comments field on the Credit Reporting screen for more information. Also, see option O29 SSPP in the Options box below, because if that option is set, the system assigns Special Comments code "I - Election of Remedy" if the transaction is enough to pay off the loan.

 

Option for Writing Off Remaining Amount

 

This transaction can be "chained" to the Sale of Security Full Write-off transaction (tran code 2510-12), if institution option AWAS (Ask for Write Off After SOS) is set up for your institution. If you run tran code 2510-06 (Sale of Security with Taxes) and the transaction amount (sale amount) isn't enough to pay off the loan and close it, the Sale of Security Full Write-off transaction will be displayed, after the following message appears:

 

 

From the Sale of Security Full Write-off transaction, the user can write-off the remaining amount of the loan. See that transaction for more details on how that works.

 

 

Card accounts (LNCARD = Y, LNPMTH = 5) must use the Sale of Security for Cards transaction (tran code 2510-09).

 

See also:

 

•Judgment Transaction (tran code 2510-02)

•Repossession Transaction (tran code 2203-00)

•Sale of Security for Cards Transaction (tran code 2510-09)

•Sale of Security Full Write-off Transaction (tran code 2510-12)