Changing Cost Basis - sale of stock - Accr Mkt Disc Interest

[liberto]

Hi,

I am having trouble with the Capital Gains report. I have a stock that sold that had an increased cost basis due to an "Accrued Market Discount Interest" distribution. I have been able to reinvest the interest distribution and then selling 1 more stock than reported on the statement, but it keeps giving me a short term sale when the whole thing was really a long term sale. Any ideas on how I can record this properly? Thanks for the help.

Jessica

[Mark]

Hi Jessica,

If you record a "distributed" distribution of type "Return of Capital", this will adjust your cost basis. To increase your cost basis, record the Return of Capital distribution as a negative amount.

A positive Ret. of Capital lowers your cost basis for all shares owned on the date of the distribution, and a negative Ret. of Capital raises your tax cost basis.

By not recording it as "Reinvested", you are not getting any more shares that you have to sell.

[liberto]

THank you for getting back to me so quickly. It worked but now I am having a problem because I need to show the Distribution Report that does not include the "Return of Capital" in the total. I found where you can select specific distributions to show on the report, but it still shows in the total balance. Is there any way to not show the :"Return of Capital" In the distribution totals?

[Mark]

Hi Jessica,

No, there is no option like this... A Return of Capital is one of the distribution types, so when reporting on all distributions, it will be included.

You could run a Custom report, and only report on the distribution type you're interested in. Example: Dividend distributions (between)