[GNC] Capital Gain Calculations on Split Stocks

[D.]

Peter, 

I thought the same about partial sales, but have found now that almost all my scenarios can be addressed in the lots tool. In my case, matching the broker's sales record up to the correct lot yields accurate results, except in this situation with a split stock. I agree with you generally about making sure I'm tracking it all the same as the broker, since that's where the tax folks are going. 

David


-------- Original Message --------
From: peterb <peterb at gmail.com>
Sent: Mon Aug 24 22:52:23 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

My experience is that the View Lots cap gain method is tractable right up
to the point where you have partial lots, and is not really usable (or, at
least, I don't find it usable) afterwards.  When I have a partial sale of a
lot, I don't even try to use it.  Just add a gain/loss transaction by hand
with the numbers that you know are correct (since these numbers are coming
from your broker and will be *what is reported to your tax authority, *they're
the best source of truth; if your trial balance is off after that,
double-check that your cost basis in GnuCash agrees with your broker's
records).

On Mon, Aug 24, 2020 at 9:41 PM 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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