On Thu, Jan 02, 2003 at 10:28:33PM -0500, Derek Atkins wrote: [snip] > > You don't need a "balancing" split -- there is nothing to balance. > And no, I do NOT believe that you should have a single, unbalanced > split to denote losses or gains. > I am not an accountant, and I haven't started using Gnucash for stock tracking yet, but IMHO a balancing split is needed.
For tax purposes it's necessary to track Capital Gains. In your example, you have bought and sold stock for a net gain of $50. This gain of $50 is Capital Gain Income for tax purposes in most jurisdictions. Depending upon your tax laws capital gains of certain types may have different inclusion rates. Example: I believe in the US capital gains on assets held longer than 18 months are taxed at a lower rate. To track this I think you would need two different income accounts and an appropriate balancing split when the asset is sold. Is there another way to track this? >From an accounting perspective I'm pretty sure the gain or loss has to be posted to an income account too. Any introductory accounting text should explain this, but unfortunately I can't find mine... I did a quick search and did find this though: "Ordinary income includes wages, business profits, dividends and interest. Since business profits can be positive or negative, ordinary income can also be an ordinary loss. Capital gain (loss) income arises when an asset that's held for investment is sold for more (less) than was paid for it." http://216.239.51.100/search?q=cache:Uz7yh-Myg5oC:faculty.washcoll.edu/bios/falter/bus401/expanded02.ppt+double-entry+accounting+%22capital+gain%22&hl=en&ie=UTF-8 http://faculty.washcoll.edu/bios/falter/bus401/expanded02.ppt I'm pretty sure even for currency transactions you still need to track the gain/loss income. e.g. If I buy 100 HKD for 20 USD, then sell 100 HKD for 25 USD, I've made 5 USD through currency trading, and this must be posted to an income account somewhere. I hope this hasn't confused the issue further... cheers, Scott _______________________________________________ gnucash-devel mailing list [EMAIL PROTECTED] http://www.gnucash.org/cgi-bin/mailman/listinfo/gnucash-devel
