Question About using Lots Window

[Chris Good]

> Message: 9
> Date: Mon, 6 Feb 2017 18:13:34 +0500
> From: "David T." <sunfish62 at yahoo.com>
> To: Gnucash <gnucash-user at gnucash.org>
> Subject: Question About using Lots Window
> Message-ID: <572E3FAB-4BA5-45AA-A36C-8834EFCEF40C at yahoo.com>
> Content-Type: text/plain; charset=utf-8
>
> Hello,
>
> I?m trying to clean up the accounting for ten years? worth of various
stock
> transactions?particularly, the capital gains portion?and a few questions 
> arise.
>
> First, I should preface all this by saying that a good portion of my data
> predates the lots feature, and it is unclear how data regarding gains that

> was
> created manually?that is, before the lots feature?can be coordinated with
> data that uses lots.
>
> For example, I have a stock account that predates my GnuCash file, and in
> this stock account, I have a sale transaction in 2007, for which I
manually
> created the gain transaction.
>
> Is there any way to manually create the lot for these shares and then
assign
> this previously-created gains transaction to the lots? It doesn?t appear
to 
> be
> possible; when I manually create a lot, and then assign the buy and sell
> transactions to that lot, the feature automatically creates the gain
> transaction. The existing gain transaction doesn?t appear in the lots 
> window,
> so I can?t assign it to the lot.
>
> The next part that I find difficult is that the automatically-generated 
> entry
> doesn?t take into account commissions and fees, which reduce the gain in
> the U.S. It is not clear to me what to do in this circumstance. Should I 
> change
> the transaction amount by the commission and fees, or will the trial
balance
> be affected? Would it be more appropriate to add splits that go to the
> commission and fees accounts, thus countering the overall gain amount? I
> haven?t been able to figure this out in my data file, and wondered whether
> anyone had advice for me.
>
> TIA,
> David

Hi David,

To start using lots on an investment account which already has manually
entered capital gains for prior sales, you need to ensure the previous
capital gain transactions are entered as their own transactions and not as
additional splits in the sale transaction. If the capital gains are separate
transactions, the scrubbing function will recognise them.

Also you must comply with the other Considerations [1].

I think it would be nice to be able to see the capital gain transactions in
the lots window.
I have raised enhancement bug 778314 [2] for this.
It would also be nice if the Lot no was automatically added to the Action
field of the capital gain/loss split when created by scrubbing as another
user suggested.
I have raised bug 778312 [3] for this.

As you have discovered, the scrubbing function does not know how to deal
with commission (or fees). Therefore you need change all the buy and sell
transactions for the account you wish to scrub, so that commission is NOT
entered as a separate expense split but accounted for in the price of the
investment account on buy and sell transaction. For want of a better term
I'm calling this 'Net Pricing', and 'Gross Pricing' when the commission is
not part of the price.
I.e. For those not sure:
  When entering a 'Buy', enter the no of shares, clear out the Price field,
enter extended price less commission in Tot Buy, then when you tab out of
the split, the (Unit) Price is calculated.
  When entering a 'Sell', enter the no of shares, clear out the Price field,
enter extended price plus commission in Tot Sell, then when you tab out of
the split, the (Unit) Price is calculated.
I'm currently still documenting this after realising this was a major
omission from my documentation on using lots.

It's unfortunate using Net Pricing makes it difficult to track commissions.
This is somewhat mitigated by the fact that if you are using Net Pricing,
you have already accounted for the commission in the share price, and any
capital gains calculated by scrubbing, so don't need to track it in order to
claim it as an investment cost in your year-end tax return. If you claimed
it again in your year-end tax return, you would be double claiming. I
recently asked the list [4] about how to use net pricing and still track
commission but I didn't get any solutions.

[1]
https://www.gnucash.org/docs/v2.6/C/gnucash-guide/invest-sell1.html#invest-s
ellConsiderations
[2] https://bugzilla.gnome.org/show_bug.cgi?id=778314
[3] https://bugzilla.gnome.org/show_bug.cgi?id=778312
[4]
http://lists.gnucash.org/pipermail/gnucash-user/2016-November/067510.html

Regards, Chris Good
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