[GNC] Gnucash-created "closing" entries

[David Cousens]

Stan,

There is one other question which may be pertinent. I am assuming the gains
and losses you are referring to are realized gains or losses and not
unrealized gains or losses.  If they are, should they not be reporting in an
Income:Investment account rather than directly into Equity. Depending on
whether they are taxable or not they could report under Taxable or
Non-taxable subaccounts of Income. Investment income is normally regarded as
ordinary income in most jurisdictions.

If they are unrealized gains or losses, it is a common procedure to record
them under Equity where you need to track them, but these should not
normally be part of any closing procedure (not usually taxable) as they are
part of the permanent accounts. That is also why Assets and Liabilities are
not closed during a closing procedure only the temporary Income and Expense
accounts for the period.

Usually any taxation calculations for the closed period will produce a
taxation liability in the next period but would not normally involve
unrealized gains/losses.

See
https://smallbusiness.chron.com/journal-entry-record-realized-loss-investment-36486.html.

Any advice about this here needs to be considered as advisory/illustrative
only and used with caution. You should seek professional accounting advice
about how to record your gains/losses and legacies relevant to your
jurisdiction. Accounting for legacies can depend a lot on local legislation
and may or may not be classified as income depending upon the circumstances.
For example, when my wife received a legacy from her mother, the capital
value of the legacy itself was not taxable under our local legislation, but
any income received from it was thereafter.

David Cousens



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David Cousens
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