Commission split buying stocks?

[Dave Reed]

On Tuesday 02 November 2004 18:20, David Harrison wrote:
> On Tue, 2 Nov 2004 19:04:52 -0400, Dave Reed <drlinux at columbus.rr.com> 
wrote:
> 
> > I'm in the U.S. The schedule D form does not have a place for 
entering
> > the commission - just the net basis and net sale.
> > 
> > I agree that it really doesn't matter as long as you end up with the
> > correct answer. I'm just surprised by the suggestion to use the
> > Expense:Commissions account also since it appears to me to make it
> > more difficult to get the gain/loss correct for your taxes. If you 
did
> > that for both sales and purchases, you couldn't just look at your
> > commission expense account and get the correct amount for that year
> > (since some of the commissions might be the basis for stocks you
> > bought this year but did not sell yet).
> 
> That's why on the purchase, I included the commissions in the purchase
> price of the stock.  It's not as critical on the sale as you are
> reporting them that year anyway.  Personally, I would use my second
> example on the sale as that would  match the tax return more closely.
> 
> I think the most critical part of posting the sale is ensuring that
> the original purchase amount is taken off the books (plus any
> non-realized gains/losses, if you are recording those).  Once that
> part is done, the rest flows from there.


I like to include the commission in both the purchase and sale so it's
consistent and makes it easier for me to make certain everything is
tracked correctly for tax purposes. I just wanted to make certain what
I was doing wasn't wrong since people on this list seem to advocate
using the commission expense account.

Thanks,
Dave