simple howto for selling stocks
Charles Day
cedayiv at gmail.com
Tue May 13 15:28:38 EDT 2008
On Tue, May 13, 2008 at 11:42 AM, Charles Day <cedayiv at gmail.com> wrote:
> On Tue, May 13, 2008 at 10:34 AM, Callum E Murdoch <cem22b at gmail.com>
> wrote:
>
> > Hi Charles,
> > Sorry for delay in reply i'm in a remote location in Africa and comms
> > have been down for days.
> > Anyway I guess i'm still missing somthing here i dont see how my
> > accounts wont balance since the original entry in gnucash i did manually
> > using Equity:Opening balance shares. Whats the difference of entering
> > the proceeds of the sale into my Bestinvest broker account and then the
> > new funds being purchased out of this account using all the cash.
> > i have done this
> > Step 1 under fund A sold all units for 1000 which is entered as a
> > transfer to Bestinvest account.
> > Step 2 In bestInvest set up new sub account Fund C, which is purchased
> > using the 1000 from the sale of Fund A
> >
> > Using this method is very straight forward am i missing somthing ?
> >
>
A correction to my reply: Assuming that the value of those units of Fund A
was not 1000 on the day of your Equity:Opening Balance transaction, there is
a capital gain (or loss) from the sale which constitutes income.
> Assuming that you bought those units of Fund A for less than 1000, then
> you have a capital gain from the sale, which constitutes income. The simple
> transfer you suggest in Step 1 doesn't capture this and will throw your
> books out of balance. Quicken hid this complication from you.
>
> Please read sections 2.2 and 2.3 of this tutorial. The examples are in
> terms of foreign currency, but apply equally to stocks or investment funds:
> http://www.mathstat.dal.ca/~selinger/accounting/tutorial.html#1<http://www.mathstat.dal.ca/%7Eselinger/accounting/tutorial.html#1>
> .
>
> Cheers,
> Charles
>
>
> > regards
> > Callum
> >
> > On Sat, 2008-05-10 at 22:48 -0700, Charles Day wrote:
> > > On Sat, May 10, 2008 at 2:03 PM, Callum Murdoch <cem22b at gmail.com>
> > > wrote:
> > > Hi,
> > > I guess i did'nt explain properly, I have an ISA with 4
> > > seperate fund
> > > holdings within it. I am transfering several of them to
> > > different funds.
> > > This is handled by the broker (Co-funds) by selling the ones i
> > > want to get
> > > rid of and buying the new funds i have chosen with the
> > > proceeds. This all
> > > under one account. These are also tax free investments.my
> > > structure is as
> > > follows
> > > Bestinvest (broker account)
> > > --Fund A
> > > -- Fund B
> > > -- Fund C
> > >
> > > selling B & C and buying D & E all under Bestinvest.
> > >
> > >
> > >
> > > I would do this as:
> > > 1. Sell B using the method described in the documentation.
> > > 2. Sell C using the method described in the documentation.
> > > 3. Buy D using the method described in the documentation.
> > > 4. Buy E using the method described in the documentation.
> > >
> > > Except for the need to manually account for the capital gains, this is
> > > the same as you would do in Quicken. Your broker should provide you
> > > with the basis and capital gains figures.
> > >
> > > Since you've said that the capital gains income is not taxable, I'd
> > > recommend creating a specific income account for this, named something
> > > like "Income:Tax-Free Capital Gains".
> > >
> > > -Charles
> > >
> > >
> > >
> > > On Sat, May 10, 2008 at 9:30 PM, Derek Atkins
> > > <warlord at mit.edu> wrote:
> > >
> > > > Hi,
> > > >
> > > > Quoting corkscrew60 <cem22b at gmail.com>:
> > > >
> > > > I am a new user to gnucash i have swapped over from quicken.
> > > On the whole i
> > > >> like it better except for selling stock. I just cant get my
> > > head round the
> > > >> instructions given in the help file. Does anyone know of a
> > > simple howto
> > > >> giving a step by step on how to do this.
> > > >> I have an investment account set up with a number of funds
> > > within it. I
> > > >> have
> > > >> sold a complete subset and bought another all under the
> > > same investment
> > > >> account. The instructions in the help file mentioning
> > > setting up a capital
> > > >> gains account I dont see why i need this when the money
> > > from the sale
> > > >> satys
> > > >> within the investment account to make the new purchase of
> > > the different
> > > >> funds
> > > >>
> > > >
> > > > Are you buying the same funds/stocks from the other broker?
> > > Or are
> > > > you selling FundA and buying FundB? In the latter case then
> > > yes,
> > > > this IS a capital gain and you should account for it. The
> > > basis of
> > > > FundB will be the ending value of FundA, but you still have
> > > a capital
> > > > gain on FundA from when you purchased it to when you sold
> > > it.
> > > >
> > > > See for example
> > > http://cvs.gnucash.org/docs/guide/capgain_example1.html
> > > >
> > > > Please remember to CC this list on all your replies.
> > > >> You can do this by using Reply-To-List or Reply-All.
> > > >>
> > > >
> > > > -derek
> > > >
> > > > --
> > > > Derek Atkins, SB '93 MIT EE, SM '95 MIT Media
> > > Laboratory
> > > > Member, MIT Student Information Processing Board
> > > (SIPB)
> > > > URL: http://web.mit.edu/warlord/ PP-ASEL-IA
> > > N1NWH
> > > > warlord at MIT.EDU PGP key
> > > available
> > > >
> > > >
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> > >
> >
> >
>
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