Accounting question: Switching retirement account managers

[David Carlson]

On 10/13/2013 10:04 PM, Christopher Singley wrote:
>
> On Mon, Oct 14, 2013 at 10:22 AM, David Carlson
> <david.carlson.417 at gmail.com <mailto:david.carlson.417 at gmail.com>> wrote:
>
>     On 10/13/2013 2:27 PM, Michael DeBusk wrote:
>     > On 2013-10-12 20:47, David Carlson wrote:
>     >
>     >> If you just do as you are suggesting,  using the corresponding
>     prices
>     >> for the sale and purchase, your cost basis, if it matters,
>     remains the
>     >> same, does it not?
>     >
>     > It would, but it seems to me that the unrealized capital gains would
>     > show up in reports as income for this year. It wouldn't break
>     anything
>     > in the real world, I suppose.
>     >
>     >
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>
>     To be precisely accurate, you should adjust for the realized capital
>     gain/loss as outlined in the GnuCash documentation in your sale
>     transactions, but I think that you can enter an offsetting realized
>     capital loss/gain in your purchase transactions, effectively
>     setting the
>     round trip net realized gain/loss to zero and restoring your previous
>     cost basis.  I think that will also put correct numbers into your
>     reports.  If you happen to run a balance report for a date during that
>     gap, you would just see a cash balance in that brokerage account.
>
>     Since the realized capital gains and losses add up to zero, it would
>     probably not hurt to omit both.
>
>     Unrealized gains or losses usually do not appear in income reports,
>     unless you specifically configure your data to show them.
>
>     David C
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>
> One problem with attempting to render the transfer as sale/repurchase
> transaction is that, even if you adjust to zero out realized
> profit/loss, you will be resetting the holding period of the assets,
> thus potentially changing the character of future realized gains from
> long-term to short-term.  This shouldn't matter for retirement plans
> (which ignore gains & only tax distributions, in general) but it can
> matter quite a bit for taxable accounts.
>
GnuCash is not very convenient for tracking holding periods.  For
infrequent events such as this, manual tracking works fine.  For day
traders, find another program that is better suited to your purpose.

> Does GnuCash not have a transfer transaction type?  Sale/repurchase is
> a brittle kludge.
>
> OP could also just directly adjust the share count via a share split,
> keeping the same basis & holding period without any gain realization -
> much cleaner books, I'd think.
>
> And sorry - can you tell me where to configure my reports to show
> unrealized gains & losses?  GAAP not tax income can be pretty
> important sometimes.
>
> Thanks!

Regarding directly transferring shares, I never tried that, but since
possible gains or losses and lot tracking are involved, it may not
work.  You could build a test file and try it for us.  Do not try it in
a real data file.  Perhaps others have looked at this.

For unrealized gains take a look at the GnuCash Tutorial and Concepts
Guide Capital Gains section for an example of documenting unrealized
gains.  Real world cases are probably not that simple, but it is a start.

David C