Brokerage Fees

[John Ralls]

On Nov 23, 2012, at 10:00 PM, Jay Ridgley <jridgley2 at austin.rr.com> wrote:

> Folks,
> 
> I need to know how to allocate brokerage fees that result from trading stocks/bonds/funds. I need to be able to allocate any fees to the cost of a purchase in order to calculate the actual cost per unit. Likewise for a sale to be able to calculate the gain(loss).
> 
> Another question is how do I move Unrealised gains(losses) to Realised gains(losses)? Neither account shows in my list of accounts, however, the Unrealised gains(losses) does show on the Balance Sheet. Once the sale is complete and the money transferred the the gain should show as Realised gains(losses), at least in my mind.

The first depends on the tax regulations in your country. In the US, basis and sale are net of costs, so you can just record that if you like. I can imagine that in some countries basis and sale might be gross and commissions, fees, and what have you might or might not be deductibles. In that case, you'd create a separate Expenses:Deductible:Commissions account and create a split in your buy and sell transactions to allocate the appropriate amount to it.

Unrealized gains and losses normally have no accounting impact. You can see them in the "profits" item at the bottom of the Chart of Accounts and in the Advanced Portfolio Report, but you don't record them in your books. If your country requires that you account for them periodically, you can either explain the rules here and some of your fellow users can make recommendations about how to handle it with Gnucash or you can ask a professional advisor how to do it. The latter is usually the safer course.

Regards,
John Ralls