Account Structure Advice

[David T.]

Hi,

As a preface, I am a longtime user of GnuCash, with over ten years’ use (so my topic isn’t about how GnuCash works). 

My question today is particularly about the advantages or disadvantages of using one account structure over another.

I am tracking a moderately large number of stocks and mutual funds that are grouped into several brokerage accounts for my family. Some are retirement accounts (and thus not taxed), others are not. Some are groups of mutual funds, others are groups of stocks. Each mutual fund and each stock pays (ideally, of course) dividends. In the interest of brevity, I will omit the account structures on the asset side, since what I want to ask about is how to handle the many income entries related to these accounts.

When I set this up many years ago, it seemed to me useful to track the dividends by individual stock or fund, with a separate income account for each—e.g., Income:Dividends:Taxable:AAPL. When I received a dividend payment, I entered a transaction from the income account directly into the brokerage cash account. Having separate income accounts for each equity allowed me to see and match my information to the brokerage annual statements (which listed and totaled dividends by equity). However, as the number of entries in our holdings has increased and changed, this has created a large number of individual income accounts, which have become increasingly unwieldy to manage. I have retained this crazy system because I am afraid that changing it will cause me to lose access to information. However, I am considering eliminating the leaf accounts altogether and aggregating the dividends into a few income accounts. I see two options here:

Option 1) Create two generic income accounts: Income:Dividends:Taxable and Income:Dividends:Untaxed. Enter transactions with a description to identify the dividend source (e.g., “Dividend AAPL”)
Benefit to this: much simpler account structure. Easier to manage new funds and equities, since they all go into one account or the other. Clearer overall read of performance.
Possible issues: most critical for tax purposes, identifying and totaling dividends by brokerage may be difficult. Also, identifying and totaling by equity may be difficult, as I do not see the possibility to sort AND TOTAL in reports.

Option 2) Create the same two generic income accounts, but add subaccounts for the brokers: Income:Dividends:Taxable:ETrade, Income:Dividends:Taxable:Schwab,  Income:Dividends:Untaxed:ETrade, Income:Dividends:Untaxed:Schwab
Here, the account structure is still rather simple, but year-end it will be easier to match up with 1099 forms. 

I guess I’d like to know if anyone can advise me strongly one way or another on whether to do this. I would hate to lose valuable information because I didn’t see the impact of a choice I made. Or is there some other, better way altogether?

TIA,
David