Wash Sales in v2016

[ThomasK]

Hi Mark,

I read the previous posts about Wash Sales (Options > Report Preferences > Capital Gains tab) and I understand the work-around, to turn it On/Off as necessary when generating a Report (and that it only affects calculations and not changing/saving data).

Q1. Can we apply Wash Sales rule to a specific Portfolio/Sub-Portfolio?

Q2. Can we memorize the on/off in a report...ie one for my use, one for accountant's? I really don't like the idea of seeing extraneous wash sales adjustments.

Yes, perhaps in the Portfolio Properties window would be the best place, especially since Wash Sales are only applicable for taxable accounts. That way it's not on the symbol but on the portfolio and thus on the "Symbol_Account.dat" file, yes?

Thanks,
ThomasK

[Mark]

Hi Thomas,

The "Use Wash Sales" option is global. It applies to all investments/portfolios/reports/graphs. If it is on, it is on everywhere. If it is off, it is off everywhere.

[paulk]

Hey Mark -

If it would be possible to apply the wash sale rule only to specific portfolios in a future release that would be a great improvement. As Thomas K pointed out only taxable accounts are subject to the rules.

[Mark]

Hi paulk,

Okay, thanks for the feedback. Typically tax-free accounts would not show up in your Capital Gains reports anyway (those are the default settings). Is there some reason you want a Capital Gains report without wash sales for a tax-free account?

[paulk]

Hi Mark

Yes. It would be useful as my custodian still tracks cost basis on nontaxable accounts and uses wash sale rules to do so.

[Mark]

Hi paulk,

Okay, thanks for the feedback.

[ThomasK]

Hi Mark, Hi PaulK,

Also, perhaps just for simplicity's sake? It would be easy enough to "disregard" the tax-owing but easier to use the same reports on all accounts.

I've spent the time to create Custom reports for my day-to-day use but going forwards I want to simply supply the accountant with Fund Manager reports (from which she also prepares the tax filings) so I'm about to start experimenting with Capital Gains reports.

How do I then turn on the Capital Gains calculations for Tax Free accounts or is this a no?

TK

[Mark]

Hi TK,

You can turn on Capital Gain reporting for tax-free investments from within a report window at:

Options / Report Preferences... / Capital Gains / Exclude Investments

and un-check "Exclude Tax Free Investments".

[ThomasK]

Great, thanks Mark.

Here's a new question for us Canadians as the CRA (Canada Revenue Agency) as the CRA does not tax differently with respect to holding terms of an investment...i.e. there is no Medium Term or Long Term per se

With that in mind:

Q1. what SHOULD be the Holding Terms settings for Canadians?
Q2. is there another area were we need to modify the settings?

thanks,
ThomasK

[Mark]

Hi ThomasK,

Q1) Under "Options / Report Preferences... / Capital Gains" you can set both the Medium and Long term holding terms to 0 months and 0 years. This will cause everything to be considered in the long term category.

Q2) I don't believe so...

[ThomasK]

Thanks Mark.

So, in Report Preferences > Capital Gains tab...Exclude Investments:

Example: 20% of the portfolio holds ABC stock, 80% is in cash in default cash account.
ABC stock has a gain of 50%...cash is flat (no interest received)

If I check the box to Exclude the Default Cash Account that mean that the yield on the portfolio is 50%.

If I UNcheck the box and allow the cash in the default cash account to be considered for yield calculation then the yield reported would be reduced by the inactive cash to 10% (ie 20% of 50%gain).

Yes?

[Mark]

Hi ThomasK,

No. The dialog at "Options / Report Preferences... / Capital Gains" is setting preferences for the Capital Gains report. This has nothing to do with yield calculations. If you choose to exclude some investments from the Capital Gains report here, that doesn't affect yield calculations elsewhere in the program.

The controls for yields are available at "Options / General Preferences... / Yields" and also at "Options / Yield Interpolation Range...".

[ThomasK]

Thanks Mark,

So, then when FM is calculating yields, is it by definition including the cash holdings in the portfolio, thus in the above example, the ROI on the portfolio is the proper 10%, yes?

[Mark]

Hi Thomas,

Yes, this is correct.