Scrub Lots and Capital Gains

[John Ralls]

On Dec 9, 2011, at 10:08 PM, David T. wrote:

> Thanks for the quick reply. I certainly understand the conundrum. 
> 
> 
> Since the commissions presumably are coming out of the Expenses hierarchy, while the net is going to assets, perhaps that could be used to determine gain. In other words, the money going to an asset ultimately is the net.
> 
> 
> However, to complicate things further, I'll throw out the point that--at least with my brokerage house--the commission for a single sale of multiple lots is distributed proportionally to the various lots, so that if I have sold 150 shares from two lots split 100/50 shares, they assign the commission 2/3 1/3. Maybe that's not a problem, but it bears noting.
> 

No, the problem you have is that Gnucash *is* calculating on net (at least on one side: 1500 sell - 950 buy is a gain of 550. Did you enter both commission splits the same way?). Under US tax law, commissions and fees are rolled up into the transaction price, so it's the *gross* (the amount that gets posted to the cash account split) that you calculate the cap gains on.

I handle it by posting the number of shares and the total amount and let Gnucash calculate the price. I don't see any point in tracking commission expense, never mind SEC and clearinghouse fees. Make the lots scrub produce the right answer, and makes it easier for me if I want to not use lots scrub (like if I don't want to use FIFO).

Regards,
John Ralls