Re: [GNC] posting of Switching of Mutual Fund
Paras, I used the lots feature for quite some time, and for a while I felt that it made my investments life so much easier. But. The day came when I had to change one capital gain entry that was off for some reason*. I changed it to the proper amount (as reported to the tax authorities), and moved on. Time passed. Reconciliations happened. I kept using the lots in the account on new accounts. And then the account wouldn't reconcile. Hours later, I discovered that the lots feature had "readjusted" my already-reconciled transaction back to what it believed was the correct number, all without any notice to me whatsoever. I will admit that the underlying issue was that I needed to change **which** lots were affected by a given sale, and that selecting the wrong lots (easy to do in a mutual fund where dividends are reinvested every so often, creating many small lots) would throw off the capital gains amounts. So, that's my fault for not understanding the accounting principles and transactions needed for recording capital gains. But any feature that's going to change reconciled transactions silently behind my back is simply not OK. So I do my capital gains transactions manually now. I need to be able to trust that the figures won't magically change on me. David T. * the list discussion for all of this is at: https://lists.gnucash.org/pipermail/gnucash-user/2022-July/102059.html On Jan 9, 2024, 3:11 PM, at 3:11 PM, Paras Desai wrote: >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:cleanoutmys...@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 transferr
Re: [GNC] posting of Switching of Mutual Fund
However, I think I have confused you with my question or term used in it. The term of "Equity Fund" was meant to signify the name of Mutual Fund that invest in all stock (Equity of the companies, that is the term used here in India for such types of fund as in like Debt Fund, Liquid Fund, Multi Assets Fund etc) I did not mean to Debit Equity as it is a standard of the accounting parlance. No, I was NOT confused. I understood that you ":Equity Fund" was an asset, a fund that invested in shares of ownership of companies. I was saying that you might record the "short term gain" (an item of income) using equity as the other side of the transaction. I even explained why that was not changing anything (that an account of type "income" was actually a temporary account of fundamental type equity, so like moving an amount between two equity accounts at the same time you were moving the amount between to accounts of type asset) Michael D Novack ___ gnucash-user mailing list gnucash-user@gnucash.org 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.
Re: [GNC] posting of Switching of Mutual Fund
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:cleanoutmys...@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 : 1, 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, 1 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 ___ gnucash-user mailing list gnucash-user@gnucash.org 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. ___ gnucash-user mailing list gnucash-user@gnucash.org 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.
Re: [GNC] posting of Switching of Mutual Fund
Hello Michael, Thanks for your time to reply my queries However, I think I have confused you with my question or term used in it. The term of "Equity Fund" was meant to signify the name of Mutual Fund that invest in all stock (Equity of the companies, that is the term used here in India for such types of fund as in like Debt Fund, Liquid Fund, Multi Assets Fund etc) I did not mean to Debit Equity as it is a standard of the accounting parlance. Thanks With regards Paras ___ gnucash-user mailing list gnucash-user@gnucash.org 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.
Re: [GNC] posting of Switching of Mutual Fund
How to do it using gnucash is not your problem. How to do it even were you using pen and ink on paper is your problem. In other words, you don't know the account to debit in order for the transaction to be in balance. Hint: Accounts of type income and expense are both temporary accounts of fundamental type equity. So if you credit an income account and debit equity by the same amount you have NOT really changed your total equity. If you closed the books, that income amount would have ended back up in equity, just as the Balance Sheet report includes the net of unclosed income and expense accounts as unrealized gain or loss (the amount that WOULD be transferred to equity were the books closed). Michael D Novack PS -- Then tutorial is intended as a very basic guide just to get you started. If you are needing to record transactions involving more complex situations then bite the bullet and work your way through a typical "Accounting 101" text (ideally, one for accounting under the rules of YOUR jurisdiction 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 ___ gnucash-user mailing list gnucash-user@gnucash.org 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.
[GNC] posting of Switching of Mutual Fund
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 : 1, 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, 1 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 ___ gnucash-user mailing list gnucash-user@gnucash.org 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.
