Re: [GNC] recording reinvested earnings

[arctostaphylos]

Dividend reinvestment is a purchase of shares. The dividend amount is income
at least as far as the tax man is usually concerned. As a practical matter,
using a broker's dividend reinvestment program, in my personal (cash, not
accrual) books, I ignore all the monkey motion (the broker reveals how and
when the cash moves and the shares get bought and settled), and record it as
a dividend amount (income) and purchase of the asset (the reinvestment) with
it. Ordinarily, both of those happen on the same business day. If the
reinvestment is delayed across the end of an accounting period, the cash
moves (dividend -> cash or sweep account -> purchase shares) might have to
be recognized because the brokerage cash or sweep account will temporarily
be bigger by the amount of the dividend. 

Mutual funds generally don't show you all the cash manipulation. They just
show on your statement or a trade confirmation that as of date X you
reinvested $some_dividend_amount in some (usually fractional) number of
shares. 

Mike B


GnuCash - User mailing list wrote
> I have been going through that and working through most of the questions 
> I have had to date.
> BTW Chapter 9 is about investments and I have that pretty much under 
> control. I have even been able to semi automate the updating of my 
> security prices with out having to go through Alpha Vantage or what ever 
> it's called.
> 
> On 3/30/21 10:56 PM, David Carlson wrote:
>> Read the tutorial and Concepts guide, paying close attention to Chapter 9
>> and particularly to <
>> https://www.gnucash.org/viewdoc.phtml?rev=4=C=guide>
>>
>> On Tue, Mar 30, 2021 at 9:46 PM Peter Parsons 

> parsonspg@

>  wrote:
>>
>>> Is there a convenient way of recording dividend/interest income that is
>>> reinvested in additional securities?( I could, of course, record an
>>> imputed income-in transaction offset by an investment-out transaction)
>>> Thanks
>>> Peter Parsons
>>>
>>> Sent from Mailhttps://go.microsoft.com/fwlink/?LinkId=550986; for
>>> Windows 10
>>>
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>>> gnucash-user mailing list
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>>
> 
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> - Anonymous
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Re: [GNC] recording reinvested earnings

[David Cousens]

Peter,

The real question here becomes whether the dividend income which is
reinvested is taxable in your hands in your jurisdiction and to what extent.
This will likely depend on whether the company pays its dividends out of
taxed or untaxed profit. Most companies would be expected to pay out of
taxed profits depending on the jurisdiction's rules and then the rules on
income taxation in that jurisdiction  Income:taxable and Income:Nontaxable
categories with appropriate sub accounts.  It may be wise to provide 
Income:Dividends And Income:DividendsReinvested as separate categories
depending on how your jurisdiction treats them for tax purposes. In my
casein Australia there is no tax advantage is dividend reinvestment to the
holder.

In Australia, for example, we are only taxed at the difference between our
marginal tax rate and the company tax rate for dividends where the company
has paid tax on the dividends before distributing the dividends. We receive
what is called a franking credit for the company tax paid, which is used as
an offset against any personal income tax on the dividend income.  If the
dividends are paid out of pretax profits at the company level, then we
receive no franking credit with our dividends  and pay the full marginal
rate on the dividends. To complicate it further some stocks can have a
franked component and and unfranked component although that is now very
uncommon. In either case you would record the income as Income:Dividends but
we could potentially have a further sub-account for franked and unfranked
dividends.



-
David Cousens
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Re: [GNC] recording reinvested earnings

[Jack Frillman via gnucash-user]

I have been going through that and working through most of the questions 
I have had to date.
BTW Chapter 9 is about investments and I have that pretty much under 
control. I have even been able to semi automate the updating of my 
security prices with out having to go through Alpha Vantage or what ever 
it's called.


On 3/30/21 10:56 PM, David Carlson wrote:

Read the tutorial and Concepts guide, paying close attention to Chapter 9
and particularly to <
https://www.gnucash.org/viewdoc.phtml?rev=4=C=guide>

On Tue, Mar 30, 2021 at 9:46 PM Peter Parsons  wrote:


Is there a convenient way of recording dividend/interest income that is
reinvested in additional securities?( I could, of course, record an
imputed income-in transaction offset by an investment-out transaction)
Thanks
Peter Parsons

Sent from Mail for
Windows 10

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Re: [GNC] recording reinvested earnings

[David Carlson]

Read the tutorial and Concepts guide, paying close attention to Chapter 9
and particularly to <
https://www.gnucash.org/viewdoc.phtml?rev=4=C=guide>

On Tue, Mar 30, 2021 at 9:46 PM Peter Parsons  wrote:

> Is there a convenient way of recording dividend/interest income that is
> reinvested in additional securities?( I could, of course, record an
> imputed income-in transaction offset by an investment-out transaction)
> Thanks
> Peter Parsons
>
> Sent from Mail for
> Windows 10
>
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> gnucash-user mailing list
> gnucash-user@gnucash.org
> To update your subscription preferences or to unsubscribe:
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-- 
David Carlson
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