Handling Initial Stock Holdings

[David T.]

--- Derek Atkins <warlord at MIT.EDU> wrote:

> > $5/share. But if this is the case, how do I track capital gains? If I
> 
> You should set up the initial balance to correspond to the initial
> purchase price, not the actual value.  I.e., the opening-balance
> transaction should reflect the basis of the stock.

I can see how I'd do that with a single lot, but what should I do with multiple
lots? Do I set up a single entry with an aggregate basis, or do I create
individual opening balance transfers for each lot? 

Moreover, what about determining the taxable status vis-a-vis the determination
of long term vs. short term capital gains? It would seem to me that this is
quite important; is the answer simply that I track this in some other way? If
so, that's too bad. 

Since my source QIF file included all of these earlier purchases, I am
wondering whether there is a way to retain the transactions in a principled way
for historical purposes. Obviously, they can't stay in the system unaltered, as
the funds to purchase the stocks came from accounts that have been purged of
all other entries in the date range. The inclusion of some records but not all
obviously throws off all the balance sheets.

Could I modify the purchase transactions to use the Equity account as a source?
What would the impact be for data integrity? Would this be maintainable? Would
I encounter trouble when next I perform a year-end closing of the books? 

Thanks!

David

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