[GNC] posting of Switching of Mutual Fund

[Paras Desai]

Hello Geoff,


Firstly, I must salute you for your very methodical and illustrative 
explanation. It is really heartening to see the kind of special efforts 
you put to first create the accounts, posting illustrative transactions 
yourself, taking screenshots and arranging them beautifully, so that one 
can understand easily. My profound and heartfelt thanks to you.


I adopted your second approach, as I need to report the taxable STCG. 
However, I took little different approach by splitting the transaction 
manually following the examples in your screenshot, and every thing fell 
in place, closing balance of both the Mutual Funds, their current 
valuation, STCG in Income head, realized gain in Advance Portfolio 
report. I need little practice before I scrub my portfolio 
automatically, as it has many entries, and I was bit hesitant,  so I did 
it manually but will certainly learn the same.


Once again thanks a ton and wish you a very happy new years ahead


My best regards to you Geoff.


Paras



*From: *Geoff [mailto:cleanoutmyshed at gmail.com]
*Sent: *Tuesday, January 09, 2024 05:32 AM +5.5
*To: *Paras Desai; GnuCash User List
*Subject: *[GNC] posting of Switching of Mutual Fund

Hi Paras

This is very easy to do in GnuCash, and it will even calculate the 
prices and capital gains (or losses) for you.

1. Use the Security Editor to create the Securities for both funds.
2. Create the Accounts for the funds and link them to the Securities.
3. Enter the Buy on Liquid - note how GNC calculates the Price.
4. Enter the Sell on Liquid, with Equity as the second account.

See attached "gnc_paras01.jpg" and note:
A. Price Database is automatically updated
B. Gain does not appear on any of your Accounts
C. Balance Sheet shows your Capital Gain as "Unrealised"

And that is all done and dusted...

...unless you need to "realise" your capital gains(losses) as 
Income(Expenses) as tax time.  If so, please read on.


GnuCash has a sensational feature called Lots that is designed to track 
and realise your capital gains & losses, but it can be a bit daunting 
for new users.

1. Open the Account for Liquid Fund
2. Actions -> View Lots
3. In the Lots window, click on "Scrub Account"

See attached "gnc_paras02.jpg" and note:
A. New Capital Gain/Loss transaction in Liquid Fund
B. Gain now shows in your Accounts***
C. Balance Sheet shows your Gain as "Retained Earnings"

*** By default, the GnuCash Lot Editor puts all Gains & Losses in an 
account called "Orphaned Gains" - you need to edit the Gain transaction 
and assign it to the appropriate Account - in this example, "STCG".


Hope this helps.

Regards

Geoff
=====


On 9/01/2024 1:19 am, Paras Desai wrote:
> Hello Sirs,
>
> I have an investment in a liquid Mutual fund and I every week 
> systematically transfer some amount to an Equity Fund (which is STP)
>
> While doing so, there is an effect of Capital gain or Loss and the 
> money does not come to any account, but the fund gets transferred to 
> another fund automatically
>
> The Transaction is like below
>
> A. Liquid Fund : SWITCH OUT  (PRACTICALLY SALE)
>
>       Units 773.14, Purchase Cost : 9696.630, Sales realization is : 
> 10000, Short term Capital Gain is 303.370
>
> B. Equity Fund: SWITCH IN (PURCHASE)
>
>      Units : 75.684, Value: 10,000
>
> Here, Money does not come to my bank or security account
>
> Normal Posting could be
>
> Cr Liquid Fund : 9696.630
>
> Cr Short Term Capital Gain : 303.370
>
> Dr Equity Fund, 10000
>
> I am just wondering, how this transaction can be effected in GNUCASH. 
> I tried to search for wiki and some old communication on this subject 
> but could not get the clear idea. Hence, thought of seeking help here.
>
> Will very much appreciate any help
>
> With my best regards
>
>
> Paras
>
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