[GNC] Capital Gain Calculations on Split Stocks

[D.]

Christopher, 

Thanks for the reply. 

I'll have to figure out how I'd trigger the --extra flag in Windows and take a look at that report. It may make the whole gains process a little easier. As it is, a statement with 10-15 sales transactions can take quite some time to work through. I understand generally how it all is working, although determining which lots the broker has designated for sale can be challenging. (It also took a while to figure out how to force the software to use a disparate set of lots for one sale. It turns out that you have to sequence the lot selection so that the open lot is the lot selected last. I could imagine an impossible-to-achieve in gnucash situation, where a sale used multiple incomplete lots, leaving them both open. Lots as currently implemented couldn't do this, although i honestly can't imagine a real world use for this.)

I tried to follow the discussion at bug 797796, but have to admit it didn't make a lot of sense to me. 

I'm more concerned about how the gains are recorded as valued transactions than with the reports, but I'll take a look at the report shortly. 

Thanks, 
David


-------- Original Message --------
From: Christopher Lam <christopher.lck at gmail.com>
Sent: Mon Aug 24 22:01:35 EDT 2020
To: "David T." <sunfish62 at yahoo.com>
Cc: Gnucash Users <gnucash-user at gnucash.org>
Subject: Re: [GNC] Capital Gain Calculations on Split Stocks

David, I don't use stock at all myself but have a couple of suggestions.

1) lots can be made much more visible with the "lot-viewer" report which is
hidden behind the --extra flag.

2) FIFO and LIFO are handled in advanced-portfolio, and adjusted cost basis
is a difficult task documented and being discussed in
https://github.com/Gnucash/gnucash/pull/763 and bug 797796.

3) stock splits are recognised and handled by advanced portfolio. I don't
understand this report myself.


On Tue, 25 Aug 2020, 9:40 am David T. via gnucash-user, <
gnucash-user at gnucash.org> wrote:

> Hi,
>
> In the last couple of days, I have learned TONS about how to manage
> capital gains with assorted lots in the GnuCash realm. The financial
> institution I use has algorithms that adjust my accounts to minimize tax
> implications. This results in sales against specific lots within
> GnuCash, and I've been able to match sales with specific lots and
> achieve numbers in GnuCash which match the institution's calculations.
> All good!
>
> However, I have one account with a single purchase, followed by a two
> for one split, followed by a partial sale. Using the lots in this case,
> however, yields wildly variant and incorrect results. In the attached
> image, you can see the full transaction history, along with the lots
> window indicating the assignment of the February sale to Lot 0 with a
> loss of $169.96.
>
> This happens because 7*53.29 (the original share price) = $373.03, and
> 203.07 - 373.03 = -169.96
>
> If I choose to use Lot 2 for the match, the result is $203.07 gain
> (7*0=$0 cost). This also is wrong.
>
> The correct calculation is: $203.07 - (7 * 53.29 / 2) = $16.55, which is
> what the institution is reporting. I am hesitant to adjust the gain
> value to match this amount, as I suspect that GnuCash will then report
> the account as out of balance. I have seen in the past that incorrect
> gains calculations can throw off the balance sheet, with painful
> remedies and memories. My questions here are:
>
> 1) Is there a way to have GnuCash properly track cost basis in an
> account with a stock split?
>
> 2) If I arbitrarily change the gains transaction, will subsequent
> balance sheet numbers be in balance?
>
> 3) What is the proper way to handle a stock split?
>
> TIA,
>
> David T.
>
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