Capital Gains Advice

[David T.]

--- On Thu, 2/3/11, Mike Alexander <mta at umich.edu> wrote:

> From: Mike Alexander <mta at umich.edu>
> Subject: RE: Capital Gains Advice
> To: "David T." <sunfish62 at yahoo.com>
> Cc: "'Users Gnucash'" <gnucash-user at gnucash.org>
> Date: Thursday, February 3, 2011, 2:55 PM
> --On February 3, 2011 12:35:15 PM
> -0800 "David T." <sunfish62 at yahoo.com>
> wrote:
> 
> > I haven't had a chance to try this out yet, but I
> wonder: is there a
> > situation when a commodity sale would NOT need to
> scrub lots and
> > generate a Gain/Loss transaction? If there are no
> exceptions, then
> > perhaps the scrubbing could be incorporated directly
> into the sale
> > process...
> 
> There are cases in which the scrub function doesn't do the
> right thing, or at least not what you might want it to
> do.  Making it automatic is probably not a good idea.

Indeed. I was envisioning more of a dialog that would offer the option of calculating capital gains. 

This dialog would prompt for the basic transaction details (date, shares, price, commission, fees, proceeds) along with destination accounts for each. Checking the Calculate Gains box would activate further controls.

There would be a radio button for lot selection between FIFO and LIFO. (I have no idea how it would handle specific lot sales). FIFO would use the current scrub feature; a LIFO feature would have to be created.

Honestly, if the lot selection option were offered, it would make sense to address the question of Long term vs. Short term gains at the same time. I see in the wiki that this issue has not been taken up--no doubt in part because the idea of figuring out when something was LTCG or STCG is dependent on many other factors outside the program.

Perhaps there would be some way to tell GC how to decide whether gains are LT or ST, either in the dialog, or in a setting. I know that configuration settings can be a bugaboo, but it might be useful here; once set for a file, there would be little need to change it again. 

In addition, there would have to be the option of telling GC which account to use for each of these.

David

> 
> > I also see in the Wiki that the scrub function uses
> FIFO; I believe
> > that there are times when LIFO or other methods are
> used. Is this
> > something that would need to be accommodated in any
> reconception of
> > commodity sales?
> 
> This is a good idea.  In general it should be possible
> to specify which lots are being sold.  No one is
> currently working on this so far as I know.
> 
> > 
> > Finally, http://wiki.gnucash.org/wiki/Concept_of_Lots explains
> that
> > Gnucash creates these lots; is this reflected in the
> data file at
> > all, or does Gnucash calculate these on the fly?
> 
> Lots are recorded in the data file, but not until they are
> needed by scrub or something else.  This also could be
> generalized.
> 
>           Mike
> 
> 
>