Mutual Funds and Realized Capital Gains question

[Matthew Vanecek]

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On Tue, 2002-09-17 at 11:20, Frank Murphy wrote:
>=20
> About a month ago, I asked this question about
> tracking Capital gains. I got no response. Is no one
> here using GnuCash to track Mutual Funds?
>=20
> Frank
>=20
> --- Frank Murphy <fjm_maillists@yahoo.com> wrote:
> >=20
> > In the US, Mutual Funds (or Unit Trusts in Britain)
> > will pay out income once a year. This income is
> > divided into Short- and Long-Term Capital Gains for
> > US
> > Federal tax purposes. How should I track this
> > information?
> >=20
> > I imagine that the income should be recorded under
> > Income:Capital Gains:Short and :Long. Then, because
> > it's reinvested, that income should be recorded as
> > going into the Assets:Mutual Fund:foo account as a
> > buy
> > transaction.
> >=20
> > Does this make sense? Will I be able to report these
> > transactions properly come tax time? Anyone else do
> > this kind of thing? Looking at the GnuCash manual,
> > it
> > seems to talk more about non-tradeable assets like
> > paintings more than stocks or mutual funds.
> >=20
> > Thanks for any tips on how you do this kind of
> > thing.
> >=20
> > Frank

I'm not an accountant, but technically you should have a "Realized
Capital Gains" account and an "Unrealized Capital Gains" account, which
would reflect change in the value of the asset.  Dividends, I believe,
would count as investment income, and not as capital gains.

You may wish to invest in an accounting book, or talk to a CPA, about
how to treat the dividend income.  Capital Gains are not taxed in the US
until they are realized (i.e., you sell the asset).

--=20
Matthew Vanecek
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