Need better documentation on using Lots [Was: Chapter 8 - investment accounts]

[Alton Brantley]

One problem with the View Lots screen is that it does not adjust the capital gains or loss for the commissions, thereby overstating a gain or understating a loss.

I work around this by tracking lots as you did, then, at the end, I add an adjustment in the Realized Gain/Loss transaction to credit the gain/loss with the sum of the commissions.

Example:

1. Buy 100 shares XYZ at 50
________________________Shares_________Price__________BUY/Debit_______SELL/Credit__
Stock:XYZ                100.          50.            500.00
Investment Expense                                     50.00
Bank:Cash                                                             550.00


2. Sell 100 shares of XYZ at 55
________________________Shares_________Price__________BUY/Debit_______SELL/Credit__
Stock:XYZ               -100.          55.00                          550.00
Investment Expense                                     50.00
Bank:Cash                                             500.00


Upon matching up lots, a Realized Gain/Loss transaction appears in the stock Ledger
________________________Shares_________Price__________BUY/Debit_______SELL/Credit__
Stock:XYZ                                              50.00
Investment Gains                                                       50.00

This would show that you gained $50. In fact, you paid $550, received $500, so you LOST $50. How do you account for that?
You add as an expense offset the sum of the Investment Expenses and adjust to Investment Gains/Losses to balance.

________________________Shares_________Price__________BUY/Debit_______SELL/Credit__
Stock:XYZ                                               50.00                              <-These two splits are the above transaction
Investment Gains                                                       50.00               <-
Investment Gains                                       100.00                              <-These two splits added to above transaction
Investment Expense                                                    100.00               <-


Now, when you look at your Investment Gains/Losses, you will see that you gained $50 in stock price but gave back $100 in commissions, yielding a net cap loss of $50