Newbie Q - Buying and Selling Capital Assets without keeping track of unrealized Gain or Loss

[John Ralls]

> On May 18, 2016, at 4:12 PM, Suresh Bazaj <suresh at bazaj.org> wrote:
> 
> Hello,
> 
> 
> 
>            The procedure described in Chapter 9 (Capital Gains) is quite
> elaborate. I only want to record the cost (buying price), sale price and
> gain or loss on the Capital assets. So, I did the following that seems to
> work:
> 
> 
> 
> 1.     Created an entry under Fixed Assets (call it Degas to match the
> example name in the User Guide). It was bought in the previous year (when I
> did not use GNUcash), so I marked it as Opening Balance in the Transfer
> column and entered the cost ($5,000) in the "Increase" Column.
> 
> 
> 
> 2.     Added an entry on the sale date under Assets:Degas with the sales
> proceeds ($4,500) going to the checking account in Transfer column and the
> sale price in the "Decrease" Column. This leaves a balance of $500.
> 
> 
> 
> 3.     Added another entry on the sale date under Assets:Degas for the
> balance $500 going to Income: LT Capital/Gain loss and the balance $500 in
> Decrease column.
> 
> 
> 
> These three transactions Zero out the Assets:Degas, added the sales proceeds
> to checking account and the $500 loss shows as a loss (red J) in thr LT
> Capital Gain column. 
> 
> 
> 
> I think it all works. Just looking for confirmation from expert GNUcash
> users to make sure that it won't bite me later for something that I have not
> thought through.

That's the correct procedure for simple sell transactions (or buys when when the opening trade is a sell). The one thing that trips up some users is that if you're creating the transaction in the stock account you must be sure to leave the quantity and price columns blank and enter only the gain or loss amount so that gnucash doesn't modify the share balance.

Regards,
John Ralls