[GNC] Transferring portion of mutual fund account to another fund account

[David Cousens]

Harry,

The procedures associated with buying and selling Stock in the Guide
https://www.gnucash.org/docs/v3/C/gnucash-guide/invest-buy-stock1.html
https://www.gnucash.org/docs/v3/C/gnucash-guide/invest-stockprice1.html
https://www.gnucash.org/docs/v3/C/gnucash-guide/invest-sell1.html
aprticularly the section on selling with lots.
 along with 
https://wiki.gnucash.org/wiki/Concept_of_Lots

The transfer can likely be handled as two transactions, one selling units in
the fund you are transferring units from and the other buying units in the
fund you are transferring to. Any expenses would be charged to an
appropriate brokerage expenses accounts. In this case since their is no
capital gain or loss involved presumably the buying and selling price will
be the cost price for the lots involved. This should make any capital gains
and loss calculations 0. 

One side effect of this approach is that the recording of the purchase date
for a lot of the first fund will not transfer to thelot for the second fund
which may affect future capital gains/loss calculations. These would have to
be calculated manually.

Both of the above transactions will require a transfer account which could
be a brokerage account under which both fund accounts live for example (see
the guide on setting up invetment accounts
https://www.gnucash.org/docs/v3/C/gnucash-guide/invest_accounts1.html for
how to do this). There should be a credit to the account you are
transferring funds from and a debit to the brokerage account. Then there
should be a credit from the Brokerage account and a debit to the account for
the new fund for the money going into the new fund. If there are expenses
involved these will  a credit to the brokerage account and debit to the
appropriate expense account.  The amounts of the credit for expense and the
credit for the transfer to the new fund from the brokerage account should
sum to equal the debit to the brokerage account associated with the transfer
of funds from the old account. Both the buy and sell transactions will
obviously occur at the same time. Using this approach may also attempt to
generate transactions for 0 amounts to accounts associated with recording
capital gains and losses. I don't know how and if GnuCash handles this case.
It should not create the 0 amount transactions but if it does you could
report it as a bug. 

The above is a generic description of one possible approach to handling the
type of transfer you describe and should not be interpreted as accounting
advice or even as the only or correct way to handle the transactions
involved. Whether it is appropriate for your case will depend on the details
of the transactions involved given in the statements from your broker or
institution handlng the funds and your local financial regulations and how
they impact the treatment.

Intuit/Quicken as a commercial product may be able to provide an exact
methodology as they will have legal and accounting experts employed who can
give jurisdiction tailored advice and customize their software for a
specific jurisdiction. GnuCash has no such specific expertise available as
it is  free software and totally developed and maintained by volunteers (in
many jurisdictions around the world) as Michael Novak and others have
indicated.

David Cousens



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David Cousens
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