Stock trades and realized gains/losses

[Derek Atkins]

Ross Boylan <RossBoylan@stanfordalumni.org> writes:

> I have a few comments on the discussion.
> 
> 1.  Might it be useful to look at the problem as being one of getting
> the correct model of a stock?  Specifically, shares of stock and other
> commodities in the current system have only a price and quantity.
> This is not really sufficient: one needs the purchase date and basis.
> Basis include price and sometimes transaction costs.
> 
> At least in the US, basis is the relevant thing for taxes, and the
> purchase date affects holding period and thus the tax rate.
> 
> If I understand lots, they permit getting this information, but they
> do not directly add it to the data model for stocks.  If the
> information were directly available, it seems to me a lot of the
> problems would get much simpler to solve.

Unfortunately you are a bit confused.  The purchase transaction
contains: number of share, value of purchase, date of purchase,
and if you want you can add other splits for, say, txn fees to
compute the basis.  So, all this information is already there.

That's not the problem.  The problem is (and always has been)
tying the purchase transaction to the sale transaction.

-derek

-- 
       Derek Atkins, SB '93 MIT EE, SM '95 MIT Media Laboratory
       Member, MIT Student Information Processing Board  (SIPB)
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