basis calculation in Advanced Portfolio report

[David Zelinsky]

I'm trying to understand how the Advanced Portfolio report calculates
Basis and Value.  It seems broken, but maybe I'm not understanding
something.

I have a stock which issued a number of "return of capital"
distributions.  As I understand it, this means the number of shares
stays the same, but the basis is reduced by the amount of the
distribution.  There is no gain or loss involved.  It should be
equivalent to a stock split followed by a sale of the extra shares at
their original cost.

Here's a hypothetical example:

  DESCRIPTION	ACCOUNT		SHARES  PRICE   BUY     SELL
  -----------------------------------------------------------
  buy		XYZCorp		100     10      1,000
  		MyBank					1,000
  -----------------------------------------------------------
  split		XYZCorp		 10
  sell		XYZCorp		-10	10		  100
  		MyBank				  100

Now the 100 shares in this account should have cost basis $900.  But
when I run the Advanced Portfolio report it shows this:

         Shares:      100.00
          Price:      $10.00
          Basis:     $909.09
          Value:   $1,000.00
  Realized Gain:       $9.09
Unrealized Gain:      $90.91
     Total Gain:     $100.00

Where are these numbers coming from?  There should be no gain at all
since all shares were sold at the same price they were bought.  Changing
the basis computation method (Average/FIFO/LIFO) does not change the
result.

For some reason, if I make the split into a separate transaction and
put it AFTER the sale of 10 shares, then the results seem correct.

--
David