[Patch] reworked advanced-portfolio.scm

Mark Johnson mrj001 at shaw.ca
Wed Feb 22 12:26:57 EST 2006


Andrew Sackville-West wrote:

>On Tue, 21 Feb 2006 19:14:33 -0700
>Mark Johnson <mrj001 at shaw.ca> wrote:
>  
>
>>As far as lots on hand go, is it first-in-first-out or 
>>first-in-last-out?  Does this vary from country to country?
>>    
>>
>
>I know this varies. I think in the US (been too long since I held stock) you can decide either way and of course the advantage of one over the other varies depending on who's writing the tax laws this year. 
>
>This could get really complicated. I guess the report shouldn't even show money-in or money out, just a cost basis for the shares, current value, gain and return. Then the basis column makes sense regardless of the method used for calculation. thoughts?
>
>A
>
Those four columns for the report seem sensible to me.

I am concerned about the statement:  "the basis column makes sense regardless of the method used for calculation".


The value in the cost basis column depends upon whether the cost basis 
is an average, FIFO, or LIFO.  For example:
buy 1:  100 shares at $10.00
buy 2:  100 shares at $11.00
sell: 100 shares at $12.00

Now, on an average basis, for the sale, my cost basis per share is 
$10.50, and my gain per share $1.50.  On a FIFO basis, my per-share cost 
basis for the sale is $10.00; my gain is $2.00 per share.  On a LIFO 
basis, my per share cost basis is $11.00; my gain is $1.00 per share.

What remains after the sale?  I have 100 shares.  On an average basis, 
my cost is $10.50 per share.  On a FIFO basis, my cost is $11.00.  On a 
LIFO basis, my costs is $10.00.

Both the cost basis and the gain columns are a function of the method 
chosen for calculating capital gains.

Mark

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