[GNC] Tax Accounting for Trust Income Received in Following Fiscal Year

[Chris Grinton]

Hi flywire,

A couple of comments before I get into the meat of my response:

   - What you're asking about here is somewhat specific to Australia, and
   the details may not be applicable to other jurisdictions.
   - I'm not an accountant, so I'm not sure how an accountant would respond
   to this. But it works for me!

So with that said, here are accounts I use to track Australian trust
distributions:
[image: image.png]
Here's an illustrative journal entry that represents the details from the
AMIT statement for the VAS ETF attached to your email:
[image: image.png]

Here's a transaction on the date you become entitled to receive a
distribution (for example - this is would be recorded on 30 June for the
final VAS distribution for the year):
[image: image.png]

And here's a transaction representing the actual payment of the
distribution (on the date the payment is made):
[image: image.png]

If anybody has a different way of modelling Australian trust distributions,
I'd love to see other examples!

Chris


On Thu, 11 Aug 2022 at 23:10, flywire <flywire0 at gmail.com> wrote:

> It's tax time again and I'm wondering if I can improve on the process I
> described in
> https://lists.gnucash.org/pipermail/gnucash-user/2021-August/097424.html
>
> It works and keeps my accountant happy but it just doesn't seem to sit well
> with double-entry accounting to just ignore a few accounts at tax time and
> slip in a funny-money cheat sheet for ETF (Mutual Fund?) investments. I'd
> welcome any suggestions for a better way of doing it.
>
> Attached is an ETF statement. The total of each of the 10 Tax codes in the
> top section for all ETFs is reported in the attached guide on p4.
>
> The Cash distributions are on the bottom left and the Attribution is on the
> bottom right don't match. I understand the issue is summarising different
> tax treatments for Dividends, Franking credits, Realised capital gains,
> Interest, and Foreign Income categories. I'd prefer to enter what is
> relevant into GnuCash but I don't understand the accounting. I also
> understand there are different ways of accounting for tax but any guidance
> would be welcome.
>
> I don't want to get into the detail of setting up an investment portfolio
> as explained in the guide and I can't see that it addresses this issue. I'd
> be happy to revalue the few funds at the end of each tax year (with
> guidance) for the balance sheet.
>
> This should feed into the financial statements for the trust which owns the
> ETF units and distributes the proceeds each year. The Cash distribution has
> been distributed with pro-rata funny-money reported.
>
> [image: VAS-annual-tax-statement-2018.png]
>
> >
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