gnucash tracking ETFs

[Mark Johnson]

I have a couple of exchange traded funds (ETFs) as investments.  These 
trade like shares of company stock on a stock exchange.  They have some 
odd requirements for tracking their cost when you calculate capital 
gains taxes.

The money paid out by these funds is classified as various types of 
income, such as:
1. dividends
2. other income/interest income
3. return of capital
4. capital gains

#3 reduces the capital cost of the investment.  #4 has the odd effect of 
increasing the cost of the investment.  Capital gains are reinvested and 
shares consolidated so that you have the same number as before.  Thus, 
you don't actually receive the capital gains that are paid out, but do 
pay taxes on them in the year they are paid out.  Naturally, I don't 
want to pay this tax twice by failing to track the capital gains 
distributions as an increase to my cost of the investment when I finally 
sell it.

My problem is how to track the capital cost of these investments.

If I track the ETF as a stock, gnucash does not seem able to track the 
changes in cost appropriately.  So I would have to use a separate 
spreadsheet to do so.  However, this renders certain parts of the 
balance sheet report inaccurate (eg. unrealized gains).

If I track the ETFs as a capital investment as described in the gnucash 
help (with cost accounts, unrealized gain accounts and so on), it will 
not track the number of shares.  Plus, it's a pain to update the value 
as the share prices fluctuate.

Any thoughts on this?  I suspect that there is a feature request of some 
sort in this.

Mark