[GNC] non-currency liabilities

Stan Brown the_stan_brown at fastmail.fm
Sun Aug 2 21:41:34 EDT 2020


On 2020-08-02 17:39, Michael or Penny Novack wrote:
> On 8/2/2020 8:00 PM, doncram wrote:
>> ............ If done that way in GnuCash, then increases (decreases)
>> in value from stock market fluctuations would be included as gains
>> (losses)
>> within the regular Income Statement of each period.  And for tax
>> purposes,
>> that would be proper:  you will have to pay income tax on the gains,
>> because it is only an informal, personally-defined thing of yours.
> 
> Most people are able to report personal income on the "cash basis" so
> gains from appreciated assets not any sort of income until realized and
> then may be either regular income or capital gains 

Well, yes and no. In the US, it's different for different types of
assets. (I assume we are not talking about a qualified retirement
account, which has different rules.) For example, shares of stock
typically pay dividends, and those are taxable when received. Mutual
funds probably pay dividends, and may also realize capital gains as they
buy and sell shares of stock, and these are also taxable to the owners
of shares in the mutual fund, even though they have not sold any shares
of the mutual fund. But, as you say, rises in the share price of stock
or mutual funds are not taxable until the gains are "realized" by
selling the shares for more than one paid.

> and may even depend
> on how disposed of << appreciated asset donated to charity and depending
> on type of asset, maybe only taxed conditionally*>> ALSO -- he said this
> was for a "college fund". There are tax advantage possibilities involved
> with that, too.

That is an excellent, excellent point. The person setting up this fund
should look at
https://www.sec.gov/reportspubs/investor-publications/investorpubsintro529htm.html
as a starting point.

> AND --- I will add, I was referring to the US. Anything taxes are
> involved always must be in reference to some specific jurisdiction.

Absolutely!  (And isn't it interesting that in the US we have special
tax advantages for savings for health care, or education, or retirement,
whereas civilized countries cover these things out of the revenue from
taxes?)

> Michael D Novack
> 
> * Thus whether capital gains from sale of primary residence is taxed
> depends on whether one has bought another primary residence within a
> certain amount of time.

And on the amount of profit on the sale;
And on whether one had lived in the sold residence a certain time;
And probably other things that don't come immediately to mind.

Fortunately, the IRS website, though not exactly light reading, is
comprehensible by almost anyone who is willing to take a deep breath and
wade through it.

-- 
Regards,
Stan Brown
Tehachapi, CA, USA
https://BrownMath.com
https://OakRoadSystems.com


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