Stocks, gains/losses, do I really have to calculate them by hand?

[John Ralls]

On Apr 25, 2012, at 3:49 PM, David Carlson wrote:

> On 4/25/2012 2:40 PM, Ross Boylan wrote:
>> On Wed, 2012-04-25 at 08:52 -0500, David Carlson wrote:
>>> I do not think that we need to have a solution that would work for all
>>> cases.  Day-traders, mutual fund accounts or 401-k accounts may
>>> require
>>> external software or spreadsheet solutions.  People who want to use
>>> LIFO
>>> or special methods of lot selection and manipulation can find their
>>> own
>>> solutions.  In the US, at least, FIFO and average cost are the only
>>> methods to be considered seriously.
>> I'm not sure who is to be doing the considering, but I think all methods
>> deserve consideration.  There's nothing in the tax code that dictates
>> those two choices, for example.
>> 
>> As of Jan 1 of this year US mutual fund companies are required to track
>> the basis of shares bought and sold; I think the rule applies to brokers
>> (i.e., stocks) too, but I'm  not sure.
>> 
>> So there may be increasing amounts of external help as time passes.
>> 
>> Tracking this stuff in a spreadsheet is difficult and awkward; it would
>> be great if gnucash could do it.  As I indicated in the "role of users"
>> thread, it's absence was a show-stopper for me.
>> 
>> I guess getting something work is a pretty substantial project, though
>> maybe the existing work on lots has done much of it.
>> 
>> Ross
>> 
>> 
> The IRS requires both brokers and mutual funds to use the average cost
> method unless the client has notified them in writing to the contrary.
> 
> Average cost method is very easy to implement.

And Charles Schwab, one of the larger and better-known online brokers, allows one to set a preference for FIFO, LIFO, High Cost First, Low Cost First, and "Tax Lot Optimizer" which orders basis by short term loss, long term loss, long term gain, short term gain.

Average cost isn't offered.

As for future development of the Lots feature, it's something I'd like to have working better too. But I think it's necessary to untangle the spaghetti of the underlying engine code first so that I have a better foundation to build on, so it will be at least a couple of years before I'd be able to start on it.

Regards,
John Ralls