Return of Capital

[Paul Schwartz]

Hope I;m not duplicating another reply, but I haven't seen one.

Assuming that all of the shares are held in the same account [gnucash], I credit the asset for the amount of the capital return. Since the return of capital applies equally to all of the shares [if they were all held during the subject income period], there would be a uniform reduction in basis for all shares. I do my computations outside of Gnucash and make the appropriate entries when shares are sold. Depending on your normal accounting practice, gains are calculated upon sale using FIFO, LIFO, or average cost.

HTH,

Paul

--- On Wed, 2/17/10, John K. Taber <jktaber at charter.net> wrote:

> From: John K. Taber <jktaber at charter.net>
> Subject: Return of Capital
> To: gnucash-user at gnucash.org
> Date: Wednesday, February 17, 2010, 7:16 AM
> REITs and REIT mutual funds
> "dividends" (taxable) may include return of 
> capital which is not taxable, but is supposed to lower your
> cost basis.
> 
> My trouble is, I don't know until mid-Feb how much return
> of capital was 
> masquerading as dividends, and I don't see how to associate
> the
> return of capital on the 1099-Div form with which lot of
> the REIT owned by 
> me.
> 
> How do you all account for return of capital, including
> adjusting your cost 
> basis? 
> 
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