Capital gains

[Jean-David Beyer]

Eric Angell wrote:
> So I've been reading this list long enough to see "capital gains on
> stocks aren't handled well; add a split or wait for 2.0" several times.
> I suppose we're close enough to actually seeing 2.0 that maybe I should
> really just wait, but my curiosity has finally gotten the best of me.
> The question of cap gains appears in the FAQ on the wiki, but the answer
> is blank, so I searched the archives to make sure I remembered things
> correctly.  I found a few messages but none of them were all that clear
> about how to actually handle this.  I can't see how to add an adjusting
> split to account for the gain, so perhaps someone can help me out...or 
> just tell me to wait for G2.
> 
> I'll give a concrete example.  Take my old 401k: many deposits (purchases
> of a mutual fund) made over a couple years left me with a cost basis of
> $8899.70 and $3.98 in reinvested dividends for a total of 361.5071
> shares.  This was sold at $26.51 per share for $9583.55: $679.87 in
> capital gains as reported by the fiduciary (which balances out if you add
> in the $3.98).  But where to account for the $679.87?  I can't just add
> an extra split to the selling transaction, because this would be 
> unbalanced:
> 
> Account receiving rollover             $9583.55 Stock account
> -361.5071    $26.51              $9583.55 Income:Cap gains
> $679.87
> 
> But I could add an additional split to the account, priced at zero: Stock
> account     0           $0       $679.87
> 
> That would make the transaction balance, but it leaves me feeling dirty.
> Is the right answer "just wait for G2", or is it really possible to do
> this cleanly by hand in the 1.8 series?
> 
On January 4, 2006, I ran into this problem. Derek Atkins replied (in part)

> Gnucash 1.8 does not handle the automatic processing of
> capital gains/losses..  So when you sold the shares you
> didn't account of the income of the gain (or expense of
> the loss)..  So the balance sheet is off. 

To which I replied:

> If the operative word is "automatic," can I not set up some capital gain
> account(s) somewhere and do it manually? I would be willing to do that, but
> I do not know accounting well enough to know where to put it. 

To which he replied:

> Yes, you could do this manually for now.  An "Income:Capital Gains"
> account would probably be best. 

This works just fine, if you are willing to do this yourself.

My GnuCash 1.8.8 account tree now looks like this (in part):

Assets
   Investments
      Ameritrade Margin
         Berkshire Hathaway Class B
Income
   Capital Gains
      Ameritrade Margin
Expenses
   Investment Expenses
      Ameritrade Margin


And the sell transaction looks like this (liberties taken to fit columns):

2006-01-04 Sell                                            -1.00
                       Assets:Investments:Ameritrade:Margin          2989.00
           Commission  Expenses:Investment Expenses:Ameritrade Margin   8.00
      Sell             Assets:Inv:Amer. Marg:Berks Hatha   -1.00  1487.12
                       Income:Capital Gains:Ameritrade Margin        1509.88

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