gnucash-docs maint: Bug 755174 Document using Lots to create investment capital gains transactions
John Ralls
jralls at code.gnucash.org
Mon Oct 31 12:41:04 EDT 2016
Updated via https://github.com/Gnucash/gnucash-docs/commit/1d753e94 (commit)
from https://github.com/Gnucash/gnucash-docs/commit/b1d68608 (commit)
commit 1d753e94eebb107470514a67f246a767736ad572
Author: goodvibes2 <chris.good at ozemail.com.au>
Date: Mon Oct 31 10:49:48 2016 +1100
Bug 755174 Document using Lots to create investment capital gains transactions
diff --git a/guide/C/ch_invest.xml b/guide/C/ch_invest.xml
index bfe90a4..53e8657 100644
--- a/guide/C/ch_invest.xml
+++ b/guide/C/ch_invest.xml
@@ -1813,6 +1813,969 @@ Income
</mediaobject>
</screenshot>
</sect2>
+
+ <sect2 id="invest-sellLots">
+ <title>Automatic Calculation of Capital Gain or Loss Using Lots</title>
+
+ <sect3 id="invest-sellLotsIntro">
+ <title>Introduction</title>
+
+ <para>
+ <ulink url="https://en.wikipedia.org/wiki/Lot">Wikipedia</ulink>
+ includes the following definition of a lot
+ </para>
+
+ <para><quote>a set of goods for sale together in an auction; or a
+ quantity of a financial instrument</quote>.
+ </para>
+
+ <para>
+ <application>&app;</application> has a built-in lot management
+ facility that can be used to keep track of capital gains or losses
+ resulting from security sales. Buy and sell transactions are put into
+ lots for the purpose of calculating the cost of the sale. More
+ specifically, a lot is used to link particular buy and sell
+ transaction splits. Lots can be automatically or manually created and
+ linked. Capital gain or loss can be automatically calculated and
+ transaction(s) created for the difference between the sale value and
+ the cost of the securities sold. <application>&app;</application>
+ refers to this process as <emphasis>scrubbing</emphasis>.
+ </para>
+
+ <para>The term <emphasis>scrub</emphasis> is used because security
+ accounts need to be cleaned after sales to ensure the difference
+ between the cost paid for securities, and value received from selling
+ them, is accounted for as capital gain or loss. If the capital
+ gain/loss is not correct, the Trial Balance
+ (<menuchoice>
+ <guimenu>Reports</guimenu>
+ <guisubmenu>Income & Expense</guisubmenu>
+ <guimenuitem>Trial Balance</guimenuitem>
+ </menuchoice>) bottom line total debits will not balance to
+ total credits.
+ </para>
+
+ <note><para>If you make an error, you can delete the capital gain/loss
+ transaction(s) and lot(s) and retry.</para>
+ </note>
+
+ <para>
+ If you are not familiar with FIFO, LIFO or Average costing, please see
+ Wikipedia <ulink
+ url="https://en.wikipedia.org/wiki/FIFO_and_LIFO_accounting">
+ FIFO and LIFO accounting</ulink> and <ulink
+ url="https://en.wikipedia.org/wiki/Average_cost_method">
+ Average cost method</ulink>.
+ </para>
+
+ <para>
+ If you are not familiar with the difference between <application>&app;
+ </application> transactions and splits, please see
+ <xref linkend="txns-registers-txntypes" />.
+ </para>
+
+ <para>
+ The <application>&app;</application> lot management facility can be a
+ useful feature, reducing manual calculation, especially if dividends
+ have been reinvested over years and there are many different costs
+ involved. It can automatically link buy transactions to sell
+ transactions using FIFO cost method and one can manually link specific
+ buy transactions to sell transactions in order to use LIFO.
+ Advanced Portfolio Report basis costs and gains/losses will agree with
+ the costs and gain/loss transactions created by scrubbing if either
+ the FIFO or LIFO cost methods are used.
+ </para>
+ </sect3>
+
+ <sect3 id="invest-sellLotsWin">
+ <title>Lots in Account Window</title>
+ <para>
+ The <guilabel>Lots in Account SSSS</guilabel> window, where SSSS is
+ a security account, is used to manually or automatically link
+ security transaction splits to lots and create capital gain/loss
+ transactions to account for the difference between the costs of buying
+ a security and the value received by selling it.
+ </para>
+
+ <para>To open the <guilabel>Lots in Account</guilabel> window, open the
+ security account register, then select
+ <menuchoice>
+ <guimenu>Actions</guimenu>
+ <guimenuitem>View Lots</guimenuitem>
+ </menuchoice>.
+ </para>
+
+ <figure pgwide="1">
+ <title>Selling Shares - Capital Gains - Lots in Account window
+ </title>
+ <screenshot id="tool-lotsInAcct">
+ <mediaobject>
+ <imageobject role="html">
+ <imagedata fileref="figures/investLots2_BeforeScrub1Lot.png"
+ format="PNG" srccredit="Chris Good" width="510px"></imagedata>
+ </imageobject>
+ <imageobject role="fo">
+ <imagedata fileref="figures/investLots2_BeforeScrub1Lot.png"
+ format="PNG" srccredit="Chris Good" ></imagedata>
+ </imageobject>
+
+ <textobject>
+ <phrase>Example of Lots in Account window</phrase>
+ </textobject>
+
+ <caption><para>An image of the <emphasis>Lots in Account
+ </emphasis> window.</para>
+ </caption>
+ </mediaobject>
+ </screenshot>
+ </figure>
+
+<!-- Link to future (soon!) new Help section
+ <para>Refer to the <ulink
+url="https://www.gnucash.org/docs/v&series-stable;/C/gnucash-help/tool-lots.html">
+ Help Manual, Chapter 8 Tools & Assistants, Lots in Account
+ </ulink> for details of the Lots in Account screen elements.
+ </para>
+-->
+ </sect3>
+
+ <sect3 id="invest-sellProcedure">
+ <title>Procedure Summary</title>
+
+ <para>Using the lot management facility for the automatic calculation of
+ capital gain or loss typically follows these steps:
+ </para>
+
+ <orderedlist>
+ <!-- Manual Lot Creation and Linking -->
+ <listitem><para><xref linkend="invest-sellManual" /> (Optional
+ depending on cost method)</para>
+ </listitem>
+
+ <listitem>
+ <!-- Automatic Creation of Capital Gain Or Loss Transactions -->
+ <para><xref linkend="invest-sellAuto" /></para>
+ </listitem>
+
+ <listitem>
+ <!-- Change Orphaned Gains-CCC to Gain/Loss Account -->
+ <para><xref linkend="invest-sellChgCapGainsAcct" /></para>
+ </listitem>
+
+ <listitem>
+ <!-- Run a Trial Balance -->
+ <para><xref linkend="invest-sellTrialBal" /> report to ensure total
+ debits balance to total credits</para>
+ </listitem>
+
+ </orderedlist>
+
+ </sect3>
+
+ <sect3 id="invest-sellManual">
+ <title>Manual Lot Creation and Linking</title>
+
+ <para>Before using this feature, ensure you have read
+ <xref linkend="invest-sellConsiderations" />.
+ </para>
+
+ <para>This functionality allows the manual linking of specfic buy and
+ sell transactions. It may be used in the case where a user wishes to
+ use a different cost method than the automatic linking method (FIFO).
+ Effectively, if one wishes the cost basis and capital gains in the
+ Advanced Portfolio Report to be consistent with the capital gains
+ transactions created by scrubbing, manual lot creation only needs to
+ be used when using LIFO or <quote>sale of designated lots</quote>
+ (the same thing for securities as far as US personal tax law is
+ concerned). This is because the scrub function can automatically do
+ FIFO linking so there is no need to do it manually and scrubbing
+ cannot be used for average costing.
+ </para>
+
+ <para>See <xref linkend="invest-sellManualExample" />.
+ </para>
+ </sect3>
+
+ <sect3 id="invest-sellAuto">
+ <title>Automatic Creation of Capital Gain Or Loss Transactions</title>
+ <note><para>Do <emphasis>NOT</emphasis> do this unless you are using
+ FIFO or LIFO to cost sales. See
+ <xref linkend="invest-sellConsiderations" /></para>
+ </note>
+
+ <para><application>&app;</application> can automatically calculate and
+ create security sale capital gain/loss transactions. Lots are used to
+ link buy transaction splits with sell transaction splits so the
+ correct cost of the securities sold can be determined.
+ <application>&app;</application> will use any existing lots, and
+ create new lots for any buy transaction splits not already linked to a
+ lot. Buy and sell transaction splits are linked to lots using FIFO
+ method.
+ </para>
+
+ <para>See:</para>
+ <para><xref linkend="invest-sellAutoExample" /></para>
+ <para><xref linkend="invest-sellAutoExample2" /></para>
+ <para><xref linkend="invest-sellFifoSplit" /></para>
+ </sect3>
+
+ <sect3 id="invest-sellChgCapGainsAcct">
+ <title>Change Orphaned Gains-CCC to Gain/Loss Account</title>
+
+ <para>
+ The capital gain/loss transaction(s) created by scrubbing uses an
+ automatically created generic <emphasis>Orphaned Gains-CCC</emphasis>
+ account (where CCC is the security currency) because <application>
+ &app;</application> doesn't know which capital gain or loss account
+ should be used. After scrubbing, the user should edit the <emphasis>
+ Orphaned Gains-CCC</emphasis> transaction split to re-assign the
+ income account to a more meaningful income (or expense) gain or loss
+ account (e.g. <emphasis>Income:Long Term Capital Gain:IBM</emphasis>).
+ </para>
+
+ <para>See <xref linkend="invest-sellChgCapGainsAcctExample" />.
+ </para>
+ </sect3>
+
+ <sect3 id="invest-sellTrialBal">
+ <title>Run a Trial Balance</title>
+ <para>Running a Trial Balance report
+ (<menuchoice>
+ <guimenu>Reports</guimenu>
+ <guisubmenu>Income & Expense</guisubmenu>
+ <guimenuitem>Trial Balance</guimenuitem>
+ </menuchoice>) after creating capital gain/loss
+ transactions, is a basic check that capital gains/losses are
+ correctly accounting for the difference between the cost paid for
+ securities, and value received from selling them. At the end of the
+ report, total debits should equal total credits.
+ </para>
+
+ <tip>
+ <para>A Trial Balance may not balance due to some other problem. To
+ determine if the cause of an imbalance is from incorrectly
+ accounting for capital gain/loss:
+ </para>
+
+ <para>If necessary, temporarily change the date of the sell
+ transaction and the capital gain/loss transaction, so they are
+ the only transactions for a particular date, then run the Trial
+ Balance as at the day before. If the Trial Balance is still out
+ by the same amount, it is not the capital gain/loss that is
+ causing the problem.
+ </para>
+
+ <para>If you find a prior <emphasis>out of balance
+ </emphasis> Trial Balance, keep running the Trial Balance
+ report with different dates until you find the date it starts
+ being out of balance. Temporarily change the transaction dates
+ for each transaction on the problem date to the following
+ day, then change the dates back to the correct date 1 at a time,
+ running the Trial Balance each time, until you identify the
+ problem transaction. When you change the date of a security
+ sell transaction, you also need to change the date of the
+ corresponding capital gain transaction as it is only the
+ sum of these that will balance in the Trial Balance.
+ </para>
+ </tip>
+ </sect3>
+
+ <sect3 id="invest-sellConsiderations">
+ <title>Considerations</title>
+
+ <para>There are some points that should be considered before using the
+ lot management facility.
+ </para>
+
+ <orderedlist>
+ <listitem>
+ <para><application>&app;</application> implements only the First In/
+ First Out (FIFO) cost method when automatically linking buy
+ transactions to sell transactions. I.e. The oldest securities are
+ always sold first. The Last In First Out (LIFO) cost method may be
+ used by manually linking the most recent buy security splits to
+ the sell split before scrubbing.
+ </para>
+ </listitem>
+
+ <listitem>
+ <para>The Advanced Portfolio Report does not use lot information
+ when calculating costs, just the security transaction splits. It
+ calculates the cost basis and gains or losses using the selected
+ <emphasis>Basis calculation method</emphasis> report option
+ (Average, FIFO or LIFO). If one wishes the Advanced Portfolio
+ Report costs and gains/losses to be consistent with the capital
+ gain/loss transactions created by scrubbing, the same cost model
+ must be used in both places.
+ </para>
+ </listitem>
+
+ <listitem>
+ <para>Scrubbing does not work correctly if there has been a previous
+ sale where the capital gain splits have been manually entered as
+ part of the sale transaction. Therefore ensure previous sales are
+ recorded as 2 transactions:
+ </para>
+
+ <table>
+ <title>Transaction 1 dealing with value received, reduction of the
+ number of shares and (optionally) commission
+ </title>
+ <tgroup cols="5">
+ <tbody>
+ <row>
+ <entry><emphasis>Account</emphasis></entry>
+ <entry><emphasis>Tot Shares</emphasis></entry>
+ <entry><emphasis>(Unit) Price</emphasis></entry>
+ <entry><emphasis>Buy (Debit)</emphasis></entry>
+ <entry><emphasis>Sell (Credit)</emphasis></entry>
+ </row>
+ <row>
+ <entry>Brokerage or Bank</entry>
+ <entry></entry>
+ <entry></entry>
+ <entry>Debit</entry>
+ <entry></entry>
+ </row>
+ <row>
+ <entry>Commission (optional)</entry>
+ <entry></entry>
+ <entry></entry>
+ <entry>Debit</entry>
+ <entry></entry>
+ </row>
+ <row>
+ <entry>Security</entry>
+ <entry>-NumSold</entry>
+ <entry>SaleUnitPrice</entry>
+ <entry></entry>
+ <entry>SaleValue</entry>
+ </row>
+ </tbody>
+ </tgroup>
+ </table>
+
+ <table>
+ <title>Transaction 2 capital gain/loss (loss in this example)
+ </title>
+ <tgroup cols="5">
+ <tbody>
+ <row>
+ <entry><emphasis>Account</emphasis></entry>
+ <entry><emphasis>Tot Shares</emphasis></entry>
+ <entry><emphasis>(Unit) Price</emphasis></entry>
+ <entry><emphasis>Buy (Debit)</emphasis></entry>
+ <entry><emphasis>Sell (Credit)</emphasis></entry>
+ </row>
+ <row>
+ <entry>Capital Loss</entry>
+ <entry></entry>
+ <entry></entry>
+ <entry>Debit</entry>
+ <entry></entry>
+ </row>
+ <row>
+ <entry>Security</entry>
+ <entry>0</entry>
+ <entry>0</entry>
+ <entry></entry>
+ <entry>Credit</entry>
+ </row>
+ </tbody>
+ </tgroup>
+ </table>
+ </listitem>
+
+ <listitem>
+ <para>The automatic capital gains calculations can handle
+ straightforward buy, sell, and return of capital transactions but
+ any transaction that affect the number of shares, even simple
+ splits, will cause it to produce wrong answers so those cases must
+ be handled manually.
+ </para>
+ </listitem>
+ </orderedlist>
+ </sect3>
+
+ <sect3 id="invest-sellManualExample">
+ <title>Example of Manual Lot Creation and Linking</title>
+
+ <para>Here is an example of selling part of a security holding using
+ the LIFO method. In this example, the most recent buy transaction
+ (dated 01/07/2016, a reinvested dividend), is linked to a lot, along
+ with the sell transaction, and the <application>&app;</application>
+ scrub function is used to calculate capital gain or loss and create
+ the capital gain/loss transaction.
+ </para>
+
+ <orderedlist>
+ <listitem><para>Open the security account's register.</para>
+ <figure pgwide="1">
+ <title>Selling Shares - Capital Gains - Security register before
+ scrubbing a single lot
+ </title>
+ <screenshot id="invest-lots0reg">
+ <mediaobject>
+ <imageobject role="html">
+ <imagedata fileref="figures/investLots0_RegB4Scrub.png"
+ format="PNG" srccredit="Chris Good" width="510px"></imagedata>
+ </imageobject>
+ <imageobject role="fo">
+ <imagedata fileref="figures/investLots0_RegB4Scrub.png"
+ format="PNG" srccredit="Chris Good" ></imagedata>
+ </imageobject>
+
+ <textobject>
+ <phrase>Example of security register before lot scrubbing
+ </phrase>
+ </textobject>
+
+ <caption><para>An image of the Security Account register in
+ transaction journal view, before lot scrubbing.</para>
+ </caption>
+ </mediaobject>
+ </screenshot>
+ </figure>
+ </listitem>
+
+ <listitem><para>Ensure all previous capital gain/loss transactions
+ are separate transactions to the sell transactions which record the
+ reduction in the number of shares and the value received.</para>
+
+ </listitem>
+
+ <listitem>
+ <para>Select
+ <menuchoice>
+ <guimenu>Actions</guimenu>
+ <guimenuitem>View Lots</guimenuitem>
+ </menuchoice> to open the <guilabel>Lots in Account SSSS</guilabel>
+ window where SSSS is the security account.
+ </para>
+
+ <figure pgwide="1">
+ <title>Selling Shares - Capital Gains - Lots before scrubbing a
+ single lot
+ </title>
+ <screenshot id="invest-lots1B4CreateLot">
+ <mediaobject>
+ <imageobject role="html">
+ <imagedata fileref="figures/investLots1_BeforeCreateLot.png"
+ format="PNG" srccredit="Chris Good" width="510px"></imagedata>
+ </imageobject>
+ <imageobject role="fo">
+ <imagedata fileref="figures/investLots1_BeforeCreateLot.png"
+ format="PNG" srccredit="Chris Good" ></imagedata>
+ </imageobject>
+
+ <textobject>
+ <phrase>Example of Lots in Account window before lot scrubbing
+ </phrase>
+ </textobject>
+
+ <caption><para>An image of the <emphasis>Lots in Account
+ </emphasis> window before lot scrubbing.</para></caption>
+ </mediaobject>
+ </screenshot>
+ </figure>
+ </listitem>
+
+ <listitem>
+ <para>Create a new lot using the <guimenu>New Lot</guimenu> button.
+ Initially this lot is not linked to any buy or sell split.</para>
+ </listitem>
+
+ <listitem><para>Highlight the new lot in the <guilabel>Lots in This
+ Account</guilabel> panel.</para>
+ </listitem>
+
+ <listitem>
+ <para>Highlight the buy split (dated 01/07/2016) of the
+ security to be sold in the <guilabel>Splits free</guilabel> panel.
+ </para>
+ </listitem>
+
+ <listitem>
+ <para>Click the <guilabel> >> </guilabel> button to link the buy
+ split with the highlighted lot. The split moves from the <guilabel>
+ Splits free</guilabel> panel to the <guilabel>Splits in Lot
+ </guilabel> panel.</para>
+ </listitem>
+
+ <listitem><para>Repeat the previous 2 steps for any other buy splits
+ that should be included in the lot (in this example, there is only
+ 1 buy split in the sale).</para>
+ </listitem>
+
+ <listitem>
+ <para>Highlight the sell split in the <guilabel>Splits free
+ </guilabel> panel.</para>
+ </listitem>
+
+ <listitem>
+ <para>Click the <guilabel> >> </guilabel> button to link the sell
+ split with the highlighted lot.</para>
+ </listitem>
+
+ <listitem>
+ <para>Check the lot <guilabel>Balance</guilabel> is as expected.
+ I.e. in this example the lot balance should be zero as the number
+ of securities sold in the lot, is matched with the same number of
+ security buys.
+ </para>
+
+ <figure pgwide="1">
+ <title>Selling Shares - Capital Gains - Lots before scrubbing a
+ single lot, after manual linking
+ </title>
+ <screenshot id="invest-lots2B4Scrub1Lot">
+ <mediaobject>
+ <imageobject role="html">
+ <imagedata fileref="figures/investLots2_BeforeScrub1Lot.png"
+ format="PNG" srccredit="Chris Good" width="510px"></imagedata>
+ </imageobject>
+ <imageobject role="fo">
+ <imagedata fileref="figures/investLots2_BeforeScrub1Lot.png"
+ format="PNG" srccredit="Chris Good" ></imagedata>
+ </imageobject>
+
+ <textobject>
+ <phrase>Example of Lots in Account window before scrubbing a
+ single lot
+ </phrase>
+ </textobject>
+
+ <caption><para>An image of the <emphasis>Lots in Account
+ </emphasis> window before scrubbing a single lot.</para>
+ </caption>
+ </mediaobject>
+ </screenshot>
+ </figure>
+ </listitem>
+
+ <listitem>
+ <para>Click the <guilabel>Scrub</guilabel> button (<emphasis>NOT
+ </emphasis> the <guilabel>Scrub Account</guilabel> button).
+ </para>
+
+ <para>The <guilabel>Lots in Account</guilabel> window has not
+ changed after using the <guilabel>Scrub</guilabel> button
+ so no example screen image is supplied.
+ </para>
+ </listitem>
+
+ <listitem><para>Continue to
+ <xref linkend="invest-sellChgCapGainsAcct" /></para>
+ </listitem>
+ </orderedlist>
+ </sect3>
+
+ <sect3 id="invest-sellAutoExample">
+ <title>Example 1 of Automatic Creation of Capital Gain Or Loss
+ Transactions</title>
+
+ <para>Create the capital gains transaction by following these steps:
+ </para>
+
+ <orderedlist>
+ <listitem>
+ <para>Open the security account's register.</para>
+ </listitem>
+
+ <listitem><para>Ensure the sell transaction has been entered with no
+ splits for capital gains or losses.</para>
+ </listitem>
+
+ <listitem><para>Select <menuchoice><guimenu>Actions</guimenu>
+ <guimenuitem>View Lots</guimenuitem></menuchoice> to open the
+ <guilabel>Lots in Account SSSS</guilabel> window where SSSS is the
+ security account.</para>
+ </listitem>
+
+ <listitem><para>If using LIFO, use the above procedure
+ <xref linkend="invest-sellManual" /> to create a lot for each sell
+ transaction, link the lot with the sell transaction and each of
+ the buy transactions that make up the sale.</para>
+ </listitem>
+
+ <listitem>
+ <para>Click the <guilabel>Scrub Account</guilabel> button which:
+ </para>
+
+ <itemizedlist>
+ <listitem>
+ <para>Creates lots for any buy transactions that are not already
+ linked to a lot and links them to sell transactions splits
+ using the FIFO method. As a transaction split can only
+ be linked to 1 lot, if a sell transaction needs to be linked
+ to multiple lots, the sell transaction split is itself split
+ into multiple subsplits. In the case of multiple subsplits,
+ it is possible to have different splits from the same
+ transaction in both the <guilabel>Splits free</guilabel> and
+ <guilabel>Splits in lot</guilabel> panels.
+ </para>
+ </listitem>
+
+ <listitem><para>Creates a separate transaction per lot for
+ capital gain/loss.</para>
+
+ <note><para>
+ If there are already gain/loss splits as part of a sell
+ transaction, <application>&app;</application> scrubbing does
+ not recognize them. So if manually adding gain/loss,
+ separate gain/loss transaction splits from the transaction
+ that reduces the <guilabel>No of Shares</guilabel>) by putting
+ them in a separate transaction if you may use scrubbing in
+ future.</para>
+ </note>
+ </listitem>
+ </itemizedlist>
+ </listitem>
+
+ <listitem><para>Continue with the instructions in the next section.
+ </para>
+ </listitem>
+
+ </orderedlist>
+ </sect3>
+
+ <sect3 id="invest-sellAutoExample2">
+ <title>Example 2 of Automatic Creation of Capital Gain Or Loss
+ Transactions - 2 Sales at Once</title>
+
+ <para>Here is an example of FIFO scrubbing without manual lot creation.
+ In this example, the transactions for 2 sales are scrubbed at once
+ but usually scrubbing would be performed after each sale. One reason
+ for scrubbing 2 sales at once, could be because there were multiple
+ sales on the same day.
+ </para>
+
+ <figure pgwide="1">
+ <title>Selling Shares - Capital Gains - Register before Scrub Account
+ </title>
+ <screenshot id="invest2-lots0reg">
+ <mediaobject>
+ <imageobject role="html">
+ <imagedata fileref="figures/invest2Lots0RegB4Scrub.png"
+ format="PNG" srccredit="Chris Good" width="510px"></imagedata>
+ </imageobject>
+ <imageobject role="fo">
+ <imagedata fileref="figures/invest2Lots0RegB4Scrub.png"
+ format="PNG" srccredit="Chris Good" ></imagedata>
+ </imageobject>
+
+ <textobject>
+ <phrase>Example of security register before Scrub Account is used.
+ </phrase>
+ </textobject>
+
+ <caption><para>An image of the Security Account register in
+ transaction journal view, before Scrub Account is used.</para>
+ </caption>
+ </mediaobject>
+ </screenshot>
+ </figure>
+
+ <orderedlist>
+ <listitem>
+ <para>Select <menuchoice>
+ <guimenu>Actions</guimenu>
+ <guimenuitem>View Lots</guimenuitem></menuchoice> to open the
+ <guilabel>Lots in Account SSSS</guilabel> window where SSSS is the
+ security account.
+ </para>
+
+ <figure pgwide="1">
+ <title>Selling Shares - Capital Gains - Lots before Scrub Account
+ </title>
+ <screenshot id="invest2-lots1B4ScrubAcct">
+ <mediaobject>
+ <imageobject role="html">
+ <imagedata fileref="figures/invest2Lots1B4Scrub.png"
+ format="PNG" srccredit="Chris Good" width="510px"></imagedata>
+ </imageobject>
+ <imageobject role="fo">
+ <imagedata fileref="figures/invest2Lots1B4Scrub.png"
+ format="PNG" srccredit="Chris Good" ></imagedata>
+ </imageobject>
+
+ <textobject>
+ <phrase>Example of Lots in Account window before Scrub Account
+ is used.
+ </phrase>
+ </textobject>
+
+ <caption><para>An image of the <emphasis>Lots in Account
+ </emphasis> window before Scrub Account is used.</para>
+ </caption>
+ </mediaobject>
+ </screenshot>
+ </figure>
+ </listitem>
+
+ <listitem>
+ <para>Click the <guilabel>Scrub Account</guilabel> button.</para>
+
+ <figure pgwide="1">
+ <title>Selling Shares - Capital Gains - Lots after Scrub Account
+ </title>
+ <screenshot id="invest2-lots2AftScrubAcct">
+ <mediaobject>
+ <imageobject role="html">
+ <imagedata fileref="figures/invest2Lots2LotsAftScrubAcct.png"
+ format="PNG" srccredit="Chris Good" width="510px"></imagedata>
+ </imageobject>
+ <imageobject role="fo">
+ <imagedata fileref="figures/invest2Lots2LotsAftScrubAcct.png"
+ format="PNG" srccredit="Chris Good" ></imagedata>
+ </imageobject>
+
+ <textobject>
+ <phrase>Example of Lots in Account window after using Scrub
+ Account
+ </phrase>
+ </textobject>
+
+ <caption><para>An image of the <emphasis>Lots in Account
+ </emphasis> window after using Scrub Account.</para>
+ </caption>
+ </mediaobject>
+ </screenshot>
+ </figure>
+
+ <note>
+ <para>After using the <guilabel>Scrub Account</guilabel> button only
+ the last lot is shown, so the above image is after the <guilabel>
+ Lots in Account</guilabel> window has been closed and reopened so
+ all the lots show.
+ </para>
+ </note>
+ </listitem>
+
+ <listitem>
+ <para>Close the <guilabel>Lots in Account SSSS</guilabel> window and
+ return to the security account register.
+ </para>
+
+ <figure pgwide="1">
+ <title>Selling Shares - Capital Gains - Register after Scrub Account
+ </title>
+ <screenshot id="invest2-lots3AftScrubAcct">
+ <mediaobject>
+ <imageobject role="html">
+ <imagedata fileref="figures/invest2Lots3RegAftScrubAcct.png"
+ format="PNG" srccredit="Chris Good" width="510px"></imagedata>
+ </imageobject>
+ <imageobject role="fo">
+ <imagedata fileref="figures/invest2Lots3RegAftScrubAcct.png"
+ format="PNG" srccredit="Chris Good" ></imagedata>
+ </imageobject>
+
+ <textobject>
+ <phrase>Example of security register after using Scrub Account
+ </phrase>
+ </textobject>
+
+ <caption><para>An image of the <emphasis>security register
+ </emphasis> after using Scrub Account.</para>
+ </caption>
+ </mediaobject>
+ </screenshot>
+ </figure>
+
+ <note>
+ <para>The security splits in the sell transactions have been split
+ into subsplits, one subsplit per lot, and a capital gain transaction
+ has been created for each security subsplit of each sell
+ transaction.
+ </para>
+ </note>
+ </listitem>
+
+ <listitem>
+ <para>Continue to <xref linkend="invest-sellChgCapGainsAcct" />
+ </para>
+ </listitem>
+ </orderedlist>
+ </sect3>
+
+ <sect3 id="invest-sellFifoSplit">
+ <title>Example 3 of Automatic Creation of Capital Gain Or Loss
+ Transactions - After a Simple Stock Split</title>
+ <para>Here is an example of FIFO scrubbing without manual lot
+ creation/linking, where the Stock Split Assistant has been used for a
+ simple stock split. In this example, 100 shares of security XYZ were
+ bought for $10.00 each, there was a simple 2 for 1 stock split for
+ zero cost (so the holding was then 200 shares @ $5.00 each), then all
+ 200 shares were sold for $6.00 each.
+ </para>
+
+ <figure pgwide="1">
+ <title>Selling Shares - Capital Gains - Register after Scrub Account
+ </title>
+ <screenshot id="investLotsSplitReg">
+ <mediaobject>
+ <imageobject role="html">
+ <imagedata fileref="figures/investLotsSplitReg.png"
+ format="PNG" srccredit="Chris Good" width="510px"></imagedata>
+ </imageobject>
+ <imageobject role="fo">
+ <imagedata fileref="figures/investLotsSplitReg.png"
+ format="PNG" srccredit="Chris Good" ></imagedata>
+ </imageobject>
+
+ <textobject>
+ <phrase>Example of security register after Scrub Account is used.
+ </phrase>
+ </textobject>
+
+ <caption><para>An image of the Security Account register in
+ transaction journal view, after Scrub Account is used.</para>
+ </caption>
+ </mediaobject>
+ </screenshot>
+ </figure>
+
+ <figure pgwide="1">
+ <title>Selling Shares - Capital Gains - Lot 0 after Scrub Account
+ </title>
+ <screenshot id="investLotsSplitLot0">
+ <mediaobject>
+ <imageobject role="html">
+ <imagedata fileref="figures/investLotsSplitLot0.png"
+ format="PNG" srccredit="Chris Good" width="510px"></imagedata>
+ </imageobject>
+ <imageobject role="fo">
+ <imagedata fileref="figures/investLotsSplitLot0.png"
+ format="PNG" srccredit="Chris Good" ></imagedata>
+ </imageobject>
+
+ <textobject>
+ <phrase>Example of security register after Scrub Account is used.
+ </phrase>
+ </textobject>
+
+ <caption><para>An image of the Security Account register in
+ transaction journal view, after Scrub Account is used.</para>
+ </caption>
+ </mediaobject>
+ </screenshot>
+ </figure>
+
+ <figure pgwide="1">
+ <title>Selling Shares - Capital Gains - Lot 1 after Scrub Account
+ </title>
+ <screenshot id="investLotsSplitLot1">
+ <mediaobject>
+ <imageobject role="html">
+ <imagedata fileref="figures/investLotsSplitLot1.png"
+ format="PNG" srccredit="Chris Good" width="510px"></imagedata>
+ </imageobject>
+ <imageobject role="fo">
+ <imagedata fileref="figures/investLotsSplitLot1.png"
+ format="PNG" srccredit="Chris Good" ></imagedata>
+ </imageobject>
+
+ <textobject>
+ <phrase>Example of security register after Scrub Account is used.
+ </phrase>
+ </textobject>
+
+ <caption><para>An image of the Security Account register in
+ transaction journal view, after Scrub Account is used.</para>
+ </caption>
+ </mediaobject>
+ </screenshot>
+ </figure>
+
+ <para>
+ The above screen shots show that scrubbing created:
+ </para>
+
+ <para>2 lots. A separate lot for each buy (it essentially treats the
+ stock split as a buy of 100 for no cost)
+ </para>
+
+ <para>2 capital gain transactions (one for each lot) on the date of the
+ sale:
+ </para>
+
+ <itemizedlist>
+ <listitem><para>
+ Lot 0: 1/7/2009 loss $400 (sale $600 - cost $1000)</para>
+ </listitem>
+ <listitem><para>
+ Lot 1: 1/7/2009 gain $600 (sale $600 - cost $0)</para>
+ </listitem>
+ </itemizedlist>
+
+ <para>Total gain $200 is correct. Whether the gain is a single long-term
+ one or one each of long-term and short-term or whether there's even a
+ distinction depends on the user's tax jurisdiction and the way the
+ split is structured. If the user needs help figuring it out they
+ should consult a professional.
+ </para>
+
+ </sect3>
+
+ <sect3 id="invest-sellChgCapGainsAcctExample">
+ <title>Example of Changing the Orphaned Gains-CCC to Gain/Loss Account</title>
+
+ <orderedlist>
+ <listitem>
+ <para>Close the <guilabel>Lots in Account SSSS</guilabel> window if
+ open and return to the security account register.
+ </para>
+
+ <figure pgwide="1">
+ <title>Selling Shares - Capital Gains - Register after scrubbing a
+ single lot
+ </title>
+ <screenshot id="invest-lots4AftScrub1LotReg">
+ <mediaobject>
+ <imageobject role="html">
+ <imagedata fileref="figures/investLots4_AfterScrub1LotReg.png"
+ format="PNG" srccredit="Chris Good" width="510px"></imagedata>
+ </imageobject>
+ <imageobject role="fo">
+ <imagedata fileref="figures/investLots4_AfterScrub1LotReg.png"
+ format="PNG" srccredit="Chris Good" ></imagedata>
+ </imageobject>
+
+ <textobject>
+ <phrase>Example of security register after scrubbing a
+ single lot
+ </phrase>
+ </textobject>
+
+ <caption><para>An image of the <emphasis>security register
+ </emphasis> after scrubbing a single lot.</para>
+ </caption>
+ </mediaobject>
+ </screenshot>
+ </figure>
+ </listitem>
+
+ <listitem>
+ <para>Find each new <emphasis>Realized Gain/Loss</emphasis>
+ transaction in the security account register — they will
+ have the same date as the sell transactions. Edit the <emphasis>
+ Orphaned Gains-CCC</emphasis> transaction split to re-assign the
+ income account to a more meaningful income (or expense) gain or
+ loss account (e.g. <emphasis>Income:Long Term Capital
+ Gain:IBM</emphasis>).
+ </para>
+
+ <tip>
+ <para>You may like to split the capital gain/loss into
+ taxable and non taxable parts if that is in accord with your
+ tax laws.
+ </para>
+ </tip>
+ </listitem>
+ </orderedlist>
+ </sect3>
+ </sect2>
</sect1>
<sect1 id="invest-dividends1">
diff --git a/guide/C/ch_reports.xml b/guide/C/ch_reports.xml
index 13cc417..61ef817 100644
--- a/guide/C/ch_reports.xml
+++ b/guide/C/ch_reports.xml
@@ -88,6 +88,24 @@ Configuration.</para>
price information in your file, the report will indicate an error. This report
includes extended information about commodity holdings, including information
about the basis, gain, and return of individual commodities.</para>
+
+ <sect4 id="rpt-advport-capgains">
+ <title>Advanced Portfolio Capital Gains</title>
+ <para>
+ The Advanced Portfolio report doesn’t use the capital gain splits to
+ calculate capital gains. It calculates the gains from the various buy and
+ sell transactions in the account without regard to whether the gains and
+ losses are recorded or not. Any realized gain splits are ignored.
+ Realized gain splits are recognized as two splits, one in the stock’s
+ account with a zero number of shares and a non-zero value, the other in an
+ income or expense account with a value that is the negative of the split
+ in the stock account. These two splits can be in a separate transaction
+ (as created by scrubbing) or in the same transaction as the sale (this
+ will cause incorrect future scrubbing). The income or expense split can
+ be split into multiple splits, say for taxable/non-taxable or
+ short/long term gains, without affecting this report.
+ </para>
+ </sect4>
</sect3>
<sect3 id="rpt_assetbarchart">
diff --git a/guide/C/figures/invest2Lots0RegB4Scrub.png b/guide/C/figures/invest2Lots0RegB4Scrub.png
new file mode 100755
index 0000000..0c7b30e
Binary files /dev/null and b/guide/C/figures/invest2Lots0RegB4Scrub.png differ
diff --git a/guide/C/figures/invest2Lots1B4Scrub.png b/guide/C/figures/invest2Lots1B4Scrub.png
new file mode 100755
index 0000000..5094d05
Binary files /dev/null and b/guide/C/figures/invest2Lots1B4Scrub.png differ
diff --git a/guide/C/figures/invest2Lots2LotsAftScrubAcct.png b/guide/C/figures/invest2Lots2LotsAftScrubAcct.png
new file mode 100755
index 0000000..e8a89f6
Binary files /dev/null and b/guide/C/figures/invest2Lots2LotsAftScrubAcct.png differ
diff --git a/guide/C/figures/invest2Lots3RegAftScrubAcct.png b/guide/C/figures/invest2Lots3RegAftScrubAcct.png
new file mode 100755
index 0000000..6b384dd
Binary files /dev/null and b/guide/C/figures/invest2Lots3RegAftScrubAcct.png differ
diff --git a/guide/C/figures/investLots0_RegB4Scrub.png b/guide/C/figures/investLots0_RegB4Scrub.png
new file mode 100644
index 0000000..ed15564
Binary files /dev/null and b/guide/C/figures/investLots0_RegB4Scrub.png differ
diff --git a/guide/C/figures/investLots1_BeforeCreateLot.png b/guide/C/figures/investLots1_BeforeCreateLot.png
new file mode 100644
index 0000000..3b4d724
Binary files /dev/null and b/guide/C/figures/investLots1_BeforeCreateLot.png differ
diff --git a/guide/C/figures/investLots2_BeforeScrub1Lot.png b/guide/C/figures/investLots2_BeforeScrub1Lot.png
new file mode 100644
index 0000000..870ab3b
Binary files /dev/null and b/guide/C/figures/investLots2_BeforeScrub1Lot.png differ
diff --git a/guide/C/figures/investLots4_AfterScrub1LotReg.png b/guide/C/figures/investLots4_AfterScrub1LotReg.png
new file mode 100644
index 0000000..239f372
Binary files /dev/null and b/guide/C/figures/investLots4_AfterScrub1LotReg.png differ
diff --git a/guide/C/figures/investLotsSplitLot0.png b/guide/C/figures/investLotsSplitLot0.png
new file mode 100644
index 0000000..4ac2ae1
Binary files /dev/null and b/guide/C/figures/investLotsSplitLot0.png differ
diff --git a/guide/C/figures/investLotsSplitLot1.png b/guide/C/figures/investLotsSplitLot1.png
new file mode 100644
index 0000000..3c4a642
Binary files /dev/null and b/guide/C/figures/investLotsSplitLot1.png differ
diff --git a/guide/C/figures/investLotsSplitReg.png b/guide/C/figures/investLotsSplitReg.png
new file mode 100644
index 0000000..bb1f548
Binary files /dev/null and b/guide/C/figures/investLotsSplitReg.png differ
Summary of changes:
guide/C/ch_invest.xml | 963 ++++++++++++++++++++++
guide/C/ch_reports.xml | 18 +
guide/C/figures/invest2Lots0RegB4Scrub.png | Bin 0 -> 153215 bytes
guide/C/figures/invest2Lots1B4Scrub.png | Bin 0 -> 63653 bytes
guide/C/figures/invest2Lots2LotsAftScrubAcct.png | Bin 0 -> 63551 bytes
guide/C/figures/invest2Lots3RegAftScrubAcct.png | Bin 0 -> 154625 bytes
guide/C/figures/investLots0_RegB4Scrub.png | Bin 0 -> 120185 bytes
guide/C/figures/investLots1_BeforeCreateLot.png | Bin 0 -> 59928 bytes
guide/C/figures/investLots2_BeforeScrub1Lot.png | Bin 0 -> 56576 bytes
guide/C/figures/investLots4_AfterScrub1LotReg.png | Bin 0 -> 132253 bytes
guide/C/figures/investLotsSplitLot0.png | Bin 0 -> 52111 bytes
guide/C/figures/investLotsSplitLot1.png | Bin 0 -> 51344 bytes
guide/C/figures/investLotsSplitReg.png | Bin 0 -> 91934 bytes
13 files changed, 981 insertions(+)
create mode 100755 guide/C/figures/invest2Lots0RegB4Scrub.png
create mode 100755 guide/C/figures/invest2Lots1B4Scrub.png
create mode 100755 guide/C/figures/invest2Lots2LotsAftScrubAcct.png
create mode 100755 guide/C/figures/invest2Lots3RegAftScrubAcct.png
create mode 100644 guide/C/figures/investLots0_RegB4Scrub.png
create mode 100644 guide/C/figures/investLots1_BeforeCreateLot.png
create mode 100644 guide/C/figures/investLots2_BeforeScrub1Lot.png
create mode 100644 guide/C/figures/investLots4_AfterScrub1LotReg.png
create mode 100644 guide/C/figures/investLotsSplitLot0.png
create mode 100644 guide/C/figures/investLotsSplitLot1.png
create mode 100644 guide/C/figures/investLotsSplitReg.png
More information about the gnucash-changes
mailing list