Account Structure Advice

[ph hermes]

i think this is really a question about what kind of fine detail you want
for the divident information from gnucash rather than from another source...

i have a small # of stocks, ETFs and i use the "lump them all into minimal
dividend accounts"  (for me that is brokerage 1- investements; brokerage 1
- roth ira; brokerage 2 - investments.... system and it works for me. if i
want specific information about 1 stock i get that in another way. at my
broker i can click on the stock and see my cost basis of the stock (buys +
reinvested dividends etc). and in other places i can get histories of
transactions. i can print this out or download it, too. but of course this
isn't "everything" as the online info only goes back so far.

you may want to look at what information you want gnucash to deliver via
say a report and then see which of your systems helps deliver that. and
which pieces of information you can get as easily or easier from your
account.

since i don't really use gnucash for my brokerage decisions... i only care
about cash flow, money in, money out, cost basis, dividends, taxes,
etc..... i don't need specific stock info.

i hope this helps.

       ph



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On Mon, Jan 25, 2016 at 9:46 AM, David T. <sunfish62 at yahoo.com> wrote:

> 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
>
>
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