Tagging additional values on transactions

Derek Atkins warlord@MIT.EDU
11 Aug 2002 10:35:11 -0400


Fair enough.

Another thing you could do is make franking credits into a 'stock'
type with zero cost-per-credit.  Then, assuming you get a $10 dividend
re-invested as 5 shares, with a $2.50 franking credit:

Dividend
        MyStock         5       $2      $10.00
        Income:Div                              $10.00
        Credits:FCR     2.50     0      0

This would balance out, but it would be _really weird_

Similarly, a currency with a zero exchange rate would be just as
unwieldly.

So, really, I don't have a good suggestion, since these Franking
Credits don't really correspond to anything in reality.  They seem to
be a fake construct for tax purposes (or they really are a special
income type).

-derek

Martijn van Oosterhout <kleptog@svana.org> writes:

> On Sat, Aug 10, 2002 at 10:55:24AM -0400, Derek Atkins wrote:
> > What is this "Franking Credit" and how does it relate to the rest of
> > the dividend transaction?  Keep in mind that a Transaction is a
> > zero-balance object, so this "Franking Credit" has to balance
> > something, I'm just not sure what it is balancing.  Could you
> > give a concrete example?
> 
> As I mentioned in my other email, it's not a real credit as such, but a
> figure to fill in your tax return to indicate the tax the company has
> already paid on it. You're right, I hadn't thought of the balencing issues.
> 
> Say you have shares in company X. They give you $100 in dividend. Normally
> that would be counted as $100 income and you would pay income tax on that.
> However, if the dividend is calculated after the company has paid tax on
> their profits, you shouldn't be taxed on the full amount.
> 
> So, on your statement you get a "Franking Credit" which represents what the
> company has paid. On the above amount it might be around $40. So after you
> have worked out your income tax (including the $100) you get to take $40 off
> that.
> 
> How do other countries deal with this? I've never though about it.
> 
> Anyway, I've figured I can also make up a currency called Franking Credits
> "FCR" and set the exchange rate to zero. Then I can add it to all the
> places I need to and make reports based on it.
> 
> This is actually better than adding extra fields to splits. Much neater.
> 
> Thanks,
> 
> > Martijn van Oosterhout <kleptog@svana.org> writes:
> > 
> > > [Please CC any replies, thanks]
> > > 
> > > As is the case probably in other countries, but when you get dividends on
> > > shares here there is another figure called a Franking Credit. It's not money
> > > in any sense but you put it on your tax return so you pay less tax. Since
> > > GnuCash is a financial program it would be nice if it could keep track of
> > > these figures also instead of me digging them up.
> > > 
> > > I guess it's related to storing tax amounts for businesses.
> > > 
> > > Anyway, since each split is stored as a list of values, how hard would it be
> > > to add a new value and have it displayed in the output screen and be allowed
> > > to edit it and such?
> > > 
> > > Thanks
> > > -- 
> > > Martijn van Oosterhout   <kleptog@svana.org>   http://svana.org/kleptog/
> > > > There are 10 kinds of people in the world, those that can do binary
> > > > arithmetic and those that can't.
> > > _______________________________________________
> > > gnucash-devel mailing list
> > > gnucash-devel@lists.gnucash.org
> > > https://lists.gnucash.org/mailman/listinfo/gnucash-devel
> > 
> > -- 
> >        Derek Atkins, SB '93 MIT EE, SM '95 MIT Media Laboratory
> >        Member, MIT Student Information Processing Board  (SIPB)
> >        URL: http://web.mit.edu/warlord/    PP-ASEL-IA     N1NWH
> >        warlord@MIT.EDU                        PGP key available
> 
> -- 
> Martijn van Oosterhout   <kleptog@svana.org>   http://svana.org/kleptog/
> > There are 10 kinds of people in the world, those that can do binary
> > arithmetic and those that can't.

-- 
       Derek Atkins, SB '93 MIT EE, SM '95 MIT Media Laboratory
       Member, MIT Student Information Processing Board  (SIPB)
       URL: http://web.mit.edu/warlord/    PP-ASEL-IA     N1NWH
       warlord@MIT.EDU                        PGP key available