Record capital gains reinvest, but no new shares??

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I'm just trying out FM. I was really encouraged after reviewing this forum and am optimistic FM is going to do what I want.

The first investment I'm trying to enter is an ETF traded in Canada. It's a 5 yr bond ETF (XGV.TO in Yahoo). Occasionally at year-end the ETF attributes a small capital gain to me, which is explained as follows on their web site:

"The capital gains distribution is in the form of additional units of the fund. Immediately following the distribution of capital gains, the number of units outstanding is consolidated so that the number of units held by investors is the same as before the capital gains distribution. Each unitholder to whom an amount is made payable in respect of a taxable capital gain will have a corresponding taxable capital gain on or in respect of which tax may be payable. The amount made payable to a unitholder will be added to the adjusted cost base of the unitholder's units. Capital gains distributions are usually paid only once a year in December."

I can't figure out how to record this. Does anyone know how to do it?

I think it should be a reinvested capital gain, but when I try to do that FM insists that my number of shares held must increase as a result. However the actual result is the number of shares stays the same but my investment cost increases (so my taxable capital gain will be reduced by this amount when I ultimately sell).

I've thought about recording a reinvested cap gain and immediately record a "split" but it'd be messy even if it worked. I'd need about 15 decimal places to try to get my share count to come out right.

Thanks in advance,
Fred

Replies:

• Re: Record capital gains reinvest, but no new shares?? Mark 23:57:40 11/08/04 (0)