[GNC] Transferring mutual funds

Thu Jul 6 11:39:53 EDT 2023

Moving the transaction would destroy historical information about where the
securities were kept.  Who knows what that data loss might do to world
history.  It might prove that history can be re-written at the whim of the
author.
The problem is that there is an asset and there is a value associated with
it. There is no invisible link between the two that GnuCash can
automatically track.  For securities, the relationship falls under the
definition of unrealized gains, and accountants have a variety of ways to
define the ultimate conversion from unrealized to realized gains.  When
GnuCash tracks one half without tracking the other half, some reports no
longer provide correct information.  It is up to the accountant to manually
maintain the relationship with whatever documentation is required to meet
local tax requirements.  While GnuCash has instructions to help synthesize
records to match U. S. federal tax record requirements, that may not work
in other jurisdictions.

That is as far as I will go down that rabbit hole.

On Thu, Jul 6, 2023 at 7:38 AM Kalpesh Patel <kalpesh.patel at usa.net> wrote:

> Hmmm. So I am a bit perplexed here.
>
> Disclaimer: I am a new-bee when it comes minutiae's of the investment
> transactions so I might be wrong what I am about to state. Feel free to
> correct me.
>
> If you note such factitious sale or closing of the transaction to preserve
> the cost basis as you mentioned, are you not altering how long the security
> is held which will impact capital gains reporting? If you alter in such a
> way, I am not sure if that is same thing as transferring the security to
> another account, at least not the way brokerages do so in the US amongst
> them or within them.
>
> Would you not want to simply move the original buy/sell transaction by
> re-pointing one of the split line item from the old account to new one?
> This I would think keeps the entire transaction intact as-is which what the
> transfer should be about and then you can have a zero valued transaction on
> the date of the transfer itself which would have no impact on any reporting.
>
>
> -----Original Message-----
> From: David Carlson <david.carlson.417 at gmail.com>
> Sent: Wednesday, July 05, 2023 1:08 PM
> To: Fred at mandfb.me.uk
> Cc: AC <gnucash at acarver.net>; gnucash-user at gnucash.org
> Subject: Re: [GNC] Transferring mutual funds
>
> AC,
>
> Fred implied, but didn't elaborate on the point that the shares in the
> original brokerage account had a cost basis that was incurred when they
> were purchased.  When you transfer them out, that is equivalent to a sale
> or closing transaction, and the cost basis should be adjusted accordingly,
> even though there were no funds involved.  Of course, that exact cost basis
> needs to be added to the receiving account as if the shares were purchased
> at the original price.  This used to be described in great detail in one of
> the help manuals, including the somewhat tricky procedure to enter realized
> gains when an actual sale happens but I haven't checked lately to see if
> those parts are still there.  I know that if you do not do those things and
> later run a trial balance or if you use the Investment Portfolio report,
> you will quickly see the error of your ways.
>
>
>
> On Wed, Jul 5, 2023 at 11:33 AM Fred Bone <Fred at mandfb.me.uk> wrote:
>
> > On 04 July 2023 at 16:29, AC said:
> >
> > > I recently moved some mutual funds from one brokerage to another.
> > > The process did not involve a sale, it was just a transfer of
> > > control from
> > the
> > > old to the new.
> > >
> > > In my current books I keep mutual funds listed as subaccount under
> > > each brokerage as such with their respective security/currency:
> > >
> > > Investments
> > > -Brokerage 1 (currency)
> > > --Fund A (security A)
> > > --Fund B (security B)
> > > -Brokerage 2 (currency)
> > > --Fund A (security A)
> > > --Fund C (security C)
> > > --Fund D (security D)
> > >
> > > I wanted to expand this to add the new brokerage and then perform a
> > > transfer of the funds from one to the other. Let's assume I moved
> > > the funds under Brokerage 1 to Brokerage 3. So the tree would look
> > > like the simplified version below (leaving out Brokerage 2 as it is
> unaffected):
> > >
> > > Investments
> > > -Brokerage 1 (currency)
> > > --Fund A (security A)
> > > --Fund B (security B)
> > > -Brokerage 3 (currency)
> > > --Fund A (security A)
> > > --Fund B (security B)
> > >
> > > The securities are the same because it's the same original mutual
> > > funds, just moved to another brokerage. The tree would be left
> > > intact with the funds under Brokerage 1 being zeroed out and the
> > > funds under Brokerage 3 starting off with the incoming values.
> > >
> > > My natural tendency was to create a transfer directly within
> > > Brokerage 1 Fund A that moved all the shares over to Brokerage 3
> > > Fund A but that didn't create the transaction I expected.
> > >
> > > By example, I transferred Fund A on July 1 which contained 10 shares
> > > at the price of the shares on that day. So in Brokerage 1 I entered
> > > -10 shares with a total sell price of X as listed on the statement
> > > from Brokerage 1. The price is autocalculated and the balance
> > > correctly goes
> > to
> > > zero.
> > >
> > > Looking inside the Brokerage 3 Fund A account I only see a
> > > transaction that has an amount in the buy column but no shares and a
> balance of zero.
> > > I can manually enter the same number of shares in that partially
> > > empty transaction but why was my thought about the transfer
> > > incorrect? Should
> > it
> > > have not transferred those shares over as well?
> >
> > Did you work in split view?
> >
> > I can replicate what I think you are saying if I don't enter the
> > separate splits.
> >
> > If I go about it the obvious way (in split view) and enter balancing
> > amounts then it all works.
> >
> > However, I'm still on 2.6.21 ...
> >
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>
> --
> David Carlson
>
>
>

-- 
David Carlson