Cap Gains and Basis

by **paulk** » Sat Apr 14, 2012 9:27 am

Hi Mark

I am having an issue in client portfolios which hold a REIT which occassionally has return of capital transactions. The problem I am having is when I sell shares but not the full position. I use average cost for all mutual funds. In the case of this particular fund , FM is calculating the average cost of the sold shares including the adjustment for two return of capital transactions dated AFTER the sale date of the partial position. Clearly this is not the required result as just the total cost divided by the shares owned at the time of sale should be used. What am I missing?

by **Mark** » Sat Apr 14, 2012 10:09 am

Hi paulk,

Can you give me a specific example to try and reproduce the problem here? For example, can you give the buy date/amount, sell date amount, return of capital date/amount, and the cost basis you're seeing, and where you're seeing it? Are you looking in a Capital Gains report? If you'd like you can attach or email us a specific investment file (*.dat), along with instructions on how to reproduce the problem.

I just put together a quick sample here where I bought some shares, sold partial shares, and later had a return of capital. I used the Average cost accounting method, and ran a Capital Gain report. The cost and gain were reported correctly, and not impacted by the return of capital that happened after the sell.

by **paulk** » Sat Apr 14, 2012 10:20 am

Mark

having trouble figuring out how to attach the file. Also, I have wash sale support enabled. I don't know if that makes a difference.

by **Mark** » Sat Apr 14, 2012 10:50 am

Hi paulk,

It does seem that using Wash Sale Rules does make a difference here. I am able to reproduce the issue here now. Let me investigate this, and I'll post back what I find.

by **paulk** » Sat Apr 14, 2012 5:39 pm

Thanks Mark. I'm hoping there is some solution to this.

by **Mark** » Sun Apr 15, 2012 1:40 pm

Hi paulk,

This bug has been confirmed, and fixed for the next release (11.9). Thanks for pointing this out. Version 11.9 will be released within the next day or two. If you can't wait for this, send me an email, and we can see about getting you a pre-release with this fix.

by **Mark** » Mon Apr 16, 2012 7:56 pm

Hi paulk,

Version 11.9 is now available from the download page, and includes the fix for this issue.

by **paulk** » Tue Apr 17, 2012 6:15 am

Thanks Mark!

Cap Gains and Basis

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