Trial Balance Report with Investment Transactions

[John Ralls]

> On Feb 13, 2017, at 8:56 AM, David <sunfish62 at yahoo.com> wrote:
> 
> John,
> 
> Explain to me how I should enter my commissions and fees, other than what I have done (see the example file on the bug). I wish to track these costs; tell me how accountants do it, so that the trial balance and balance sheet will work for me.

David,

I'm not an accountant, I'm an engineer, and personal stock investments aren't covered in my Accounting 101 textbook so I have no idea how accountants would do it. I do know that you can't book the same money twice and expect things to balance out.

I already suggested one way: Instead of booking commissions and fees to expense accounts, book them to subaccounts of Income:Capital Gains as negative income and use the gross capital gain amount for the positive income. There are some complications inherent in that approach: You'll need a separate pair of sub accounts for each flavor of capital gain you're required to recognize (long term, short term, section 1250, etc.) and since you usually don't know which one will apply when you buy the stock you'll have to reassign the buy-side commission when you sell; if you sell only part of a lot then you will have to apportion the buy-side commission to each sale.

Another way you could do it would be to create a special "Memo Expense" top-level account with Commission and SEC Fee sub accounts and exclude those accounts from your reports. In this method you'll still net out the buy and sell values so that the capital gain matches what your broker reports to the IRS; the memo splits are just memos off to the side. Parts of GnuCash like the status bar will be a bit confused because there's no way to tell them to ignore the memo accounts.

I don't know how the Advanced Portfolio Report will behave in that case. It makes some assumptions about the way you structure your stock transactions and I doubt that either of these approaches match those assumptions.

Regards,
John Ralls