Mutual Funds Cap Gains or Dividend Reinvestment

[Aaron Gaudio]

On Sat, 2004-09-11 at 15:10 +0000, rwshep2000.3129421 at bloglines.com
wrote:

> Asset: Mutual Fund X
> 
> Dividend Income: Mutual Fund X
> Capital Gains: Mutual Fund X
> ...
> and so
> one, one account per each type of gain (loss) per fund. Since it sets up (in
> the background, as needed) appropriate accounts, per fund, it is able to track
> everything that happens on a per-fund basis.  When you do a reinvestment in
> Money, you select the appropriate action, eg., "Reinvest Dividend," and apparently
> it makes all the entries necessary.  I don't think it simply flags the reinvestment
> purchases to exclude them from the basis cost.  If it did, I don't think you'd
> get all the subaccounts in the export.

IMO, there is one of two ways reinvests should be handled:

1. A direct transfer from the income:dividend:X account to the
assets:portfolio:X account.

2. A direct transfer from income:dividend:X to assets:portfolio (where
non-reinvestments would go) and then another from assets:portfolio to
assets:portfolio:X

What is the standard QIF way of handling this? What is the standard OFX
way? Maybe it would just be better for the report to handle both
possibilities.

At any rate, as I've stated in previous posts: reinvestments SHOULD be
counted in the basis cost, because they are counted in the current value
AND also should be counted in income (added to numerator in the total
return ratio). Please see the archives for my past posts about this,
including example formulas.

-- 
Aaron Gaudio <prothonotar at tarnation.dyndns.org>