According to H&R Block, determining your basis involves "generally the purchase price plus any commissions or fees paid."
So, unless I'm missing something, no, your brokerage *won't* report a gain in this example, since gains are calculated against your basis, and not the price. And basis includes fees. David T. On Nov 5, 2024, 11:13 PM, at 11:13 PM, R Losey <[email protected]> wrote: >A very interesting way to look at it; I agree that many exchange >services >have a "worse" rate because it includes their fee; others show a "good" >rate, but tack on fees. And clearly, if there is no fee shown in a >receipt, >one cannot enter calculate it. > >Although your statements about the stock are true as far as they go, I >would have thought that if you purchase a stock at $9.50/share, that is >the >"price". Your "cost" is actually $10/share. My understanding is that >if >you sell it for $9.75/share, the brokerage will report that you have a >gain >of $0.25/share, and one will be liable for applicable taxes on capital >gains. "Price" and "cost" are not the same thing. > > >On Mon, Nov 4, 2024 at 10:23 PM [email protected] ><[email protected]> >wrote: > >> Note: I am not an accountant, and am based in the US, whose laws will >> differ from Switzerland's. >> >> I agree that the Dividends account belongs under Income. >> >> As an overview, Richard, I'd point out that if you buy something for >1000, >> and 10 of the cost is for tax (or delivery, or service charges, or >> whatever), your cost is still 1000. While it may be interesting to >identify >> those specifics, for personal books, it is a lot of work that has >little >> benefit. >> >> In specific: >> >> Many forex outfits I encounter don't even tell you their fees. They >simply >> tell you the final exchange rate you receive. To track the fees, >you'd have >> to know the inner workings of each firm and calculate them yourself >(or >> know the rate they are getting, and calculate the difference) . >Personally, >> it's not important information for the amount of work involved. (This >is >> similar to the recurring discussion about mortgage payments that do >not >> match) >> >> Similarly, with the stock, you can say that you bought that stock at >9.50 >> a share, but if you don't recoup the service charge, you'll still >lose >> money when you sell at 9.75 a share. Moreover, in GnuCash, if you use >the >> lot feature to manage capital gains, it will mis-calculate the gains >if you >> track the service fees separately. At least, that was my experience >when I >> used the lot feature some years back. (I stopped using it for >various >> reasons) >> >> And a final note: GnuCash never stores the exchange rate. It >calculates it >> from the two (actual) amounts include in the transaction. Focusing on >the >> number there (and whether it matches what the broker says the share >price >> is) will result in dissatisfied experiences since it never matches. >> >> David T. >> On Nov 5, 2024, at 3:59 AM, R Losey <[email protected]> wrote: >>> >>> Hello. >>> >>> I don't think that the "USD Dividends" would be under IBKR - that >should be >>> somewhere else, probably under "Income" somewhere. When you are paid >a >>> dividend, it either goes into the "Cash" fund, or else it is >reinvested and >>> more stock is purchased. If the dividends are invested, you'd have >a >>> "purchase" of that stock. For example, if you received $100 in >dividends >>> and it purchased 5 shares of VT stock (using simple numbers to keep >it >>> easy), you have a transaction in IBKR-VT that purchased 5 shares for >$100 >>> and the "other" account would be an income account -- for me, it >goes in >>> "Income:Investment Income:Taxable:Dividends". >>> >>> Other comments -- see below, but I do want to note (as others have) >that I >>> am not an accountant. >>> >>> >>> On Sun, Nov 3, 2024 at 4:25 AM Boniforti Flavio ><[email protected]> >>> wrote: >>> >>> Hi Richard. >>>> I think I was already going that route --> >>>> [image: image.png] >>>> >>>> As of now, I have just put all the CHF Cash in that account. >>>> As I've added CHF in 5-6 different transactions and in between >those I >>>> have also converted to USD and bought VT stocks, would I need to >zero the >>>> "CHF Cash" account, then add each CHF wire transfer transaction >>>> individually? >>> >>> >>> >>> If each wire transaction is separate, there is the chance that the >exchange >>> rate would be different, so I would enter them as different >transactions. >>> >>> But unless you take all of the funds from the CHF Cash account, it >doesn't >>> need to be zeroed. Assuming that there is $1000 in CHF Cash and >$1000 in >>> USD Cash, you could remove any or all of the CHF Cash, and then add >the >>> appropriate USD amount to the USD Cash account. >>> >>> Next, you would have a transaction for the purchase of VT stock, >with the >>> funds comes from the USD Cash account. >>> >>> >>> >>> And then for each currency conversion I did, create the according >>>> transaction between "CHF Cash" and "USD Cash" accounts, after >which I would >>>> add the VT purchase transactions - right? >>> >>> >>> >>> That sounds right to me. >>> >>> >>> >>> If I do it like that, I could "hide" the ForEx trading fees by >simply >>>> adjusting the conversion rate (like if I had converted CHF 1'000.- >and I >>>> got USD 1'140.- and paid 1 USD fees, I could just "ignore" the fee >and >>>> adjust the conversion rate so that it gives CHF 1000 --> USD >1140). Would >>>> that work? >>> >>> >>> >>> It may "work" but it would probably be more accurate to have a split >>> transaction with that shows the CHF 1'000 decreasing by 1'000 and >then the >>> USD account going up by 1'141 with a USD 1 decrease assigned to the >account >>> where you track the exchange fees. That way the CHF-to-USD rate >would be >>> correct, and you could see what you are paying for exchange rates. >>> >>> >>> >>> | Would this process also work when buying VT stocks? In that case, >I buy a >>> fixed amount of VT stocks at the VT price, and I could >>> | "hide" the fees by adjusting the stock unit price?! >>> >>> Again, I suppose you **could** do that, but I usually put the fees >in >>> separately. If I spend $1000 purchasing a stock that is worth $998, >the >>> other $2 is assigned to my account for Investment Fees >>> ("Expenses:Investment:Fees") >>> >>> >>> >>> What's not clear to me at this point is: if I will have 1000 VT >stocks, >>>> where will the actual value be reflected/calculated? Is it >depending on >>>> manual retrieving the VT quotes via Finance::Quote? >>> >>> >>> >>> Yes, if you are getting quotes via the stock quote your VT value >will >>> reflect the last price update you retrieve. It will NOT change your >>> transaction. However, by "hiding" the fee as you propose, it will >look >>> like you've lost money when you have not. See the following example: >>> >>> You spend $100 to purchase 10 shares of VT, but there is a fee of >$5. The >>> reality is that you paid $95 for those 10 shares, or $9.50 a >share... >>> however, by "hiding" the fee in the price, it looks as if you paid >>> $10/share. The next day, the price goes up to $9.75 -- you have >actually >>> gained $2.50 ($0.25 gain on 10 shares); however, in GnuCash, it will >look >>> like the price has "dropped" from $10 to $9.75 and that you have >lost $0.25 >>> per share). >>> >>> >>> >>> Thanks, >>>> F. >>> >>> >>> >>> I hope this is helpful... >>> >>> >>> >>> >>>> Am Mo., 21. Okt. 2024 um 19:32 Uhr schrieb R Losey ><[email protected]>: >>>> >>>> >>>>> -- >>>>> ------------------------------ >>>>> >>>>> Richard Losey >>>>> [email protected] >>>>> Micah 6:8 >>>> >>>> >>>> >>>> > >-- >_________________________________ >Richard Losey >[email protected] >Micah 6:8 _______________________________________________ gnucash-user mailing list [email protected] To update your subscription preferences or to unsubscribe: https://lists.gnucash.org/mailman/listinfo/gnucash-user ----- Please remember to CC this list on all your replies. You can do this by using Reply-To-List or Reply-All.
