US tax with foreign stocks advance portfolio

[Christopher Lam]

Hi Ignacio

I agree there are limitations with exchange rate valuation.

I note you were using the Advanced Portfolio report. Some issues also apply
to the other reports with currency conversion

I can see two issues here:

1. options for exchange rates are:

 a) locked on to report date
 b) locked on to the most recent rate available
 c) weighted average (not sure what this means)
 c) average rate (not sure what this means)

I think there's an old mechanism to calculate according to exact rate
obtained for the transaction. I recall there was an issue with performance
in the past. Perhaps we can investigate further, but no promises here.

Moreover, let's say I own 1 share of AAPL. The price is $1000. The company
decides to a 10:1 stock split. I receive 9 additional shares, and the price
is now $100. My net worth hasn't changed but the charts cannot handle the
new price and the new stock quantity smoothly.

2. your question mentions US tax with foreign stocks.

I assume you are a US resident and hold foreign stocks. Let's assume it's
GSK in London. There are now two rates applicable - GSK-GBP and GBP-USD. I'm
not 100% sure about how it calculates GSK -> GBP -> USD. What to do when
some price data is missing?

I think occasionally the GSK is subsequently valued to 0 USD which is
unsatisfactory.

Further discussion welcome!

On 21 Dec 2017 10:32 AM, "Ignacio Fernandez Ortega" <nfernan at gmail.com>
wrote:

> I am going to respond to myself just to keep this information if someone
> ask the same question in the future.
>
> No, it seems there is no way. Advance portfolio applies always the same
> exchange rate to basis and value. (I am trying to understand the trading
> option but I am not sure it is going to help me)
> The other way to do it is buying the stock (initial and additional
> purchases) and keeping the price list for this security using the Gnucash
> main currency. In my case $.
> That's the only way to keep the cost basis with the original exchange rate,
> basically deleting the exchange.
>
> Pros: the advance portfolio is updated and you only use one currency
> Cons: forget about the automatic download of quotes. You have to do it
> manually.
>
> If your portfolio only has 2 stocks probably is fine but with 10 stocks and
> several purchases and dividends every week it is a lot of work.
>
> I wish I could understand the program to fix the advance portfolio format
> but I think in my case it could make sense to have a spreadsheet.
>
> Thanks
>
>
> ***********************
>
> Hi,
>
> Question about how Gnucash handles the foreign stocks. My Gnucah main
> currency is dollar but I have some stocks in EUR.
> Gnucash is updating the basis cost in dollar every time I update the EUR/$
> exchange rate in the Advance Portfolio report.
> However, IRS requires comparing the selling price with cost basis with the
> exchange rate at each specific date.
> https://www.irs.gov/individuals/international-taxpayers/foreign-currency-
> and-currency-exchange-rates
>
> Is there a way to keep the cost basis with fixed exchange rate?
>
> Thanks
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