proceedsBySale

Proceeds by sale, commonly phrased as proceeds of sale, refers to the money received from the sale of an asset or property. In general, it denotes the total consideration realized by the seller at the point of sale, before any post-sale deductions. The term is used across accounting, real estate, and legal contexts to distinguish sale-derived funds from other sources of income.

In accounting and finance, a distinction is made between gross proceeds and net proceeds. Gross proceeds are the total sale price or consideration received. Net proceeds are gross proceeds minus related selling costs such as commissions, closing costs, taxes, liens, and any indebtedness paid from the sale proceeds. In some cases, proceeds may be held in escrow pending distributions or allocations under applicable agreements or laws.

Common contexts for discussing proceeds by sale include real estate transactions, business liquidations, inheritance or estate administration, and bankruptcy proceedings. In tax law, proceeds from sale may be subject to capital gains tax or other taxes, depending on the seller’s basis and jurisdictional rules. Terms and treatment can vary by country and contract, so precise definitions are typically found in the governing documents of a transaction.

Example: A house sells for 500,000. Real estate commissions and closing costs total 40,000. Net proceeds would be 460,000, subject to any required mortgage payoffs or other lien settlements. The remaining funds may be distributed to creditors, beneficiaries, or other parties in accordance with the applicable agreement or law.

See also: gross proceeds, net proceeds, capital gains, proceeds of sale (tax).