Re: Withholding Tax

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In Reply to: Withholding Tax posted by Daniel on August 11, 2005 at 17:44:44:

: As a Canadian resident, my broker is required to withhold 15% tax from dividend payments for my US stocks, per IRS requirements. If my stock pays $60 in dividends, I only receive $51 in my brokerage account, so I need to make some sort of adjustment to avoid my cash account being out of kilter.

: What is the best way to handle this in FM when using a cash account? Should I set up a second cash account to track the tax being withheld? Treat the tax as an account fee? Manually adjust my original cash account some other way?

Hi Daniel,

I'd suggest recording the dividend as it is payed ($60), and then record a sell in your cash account for the $9 that was taken out in taxes. In general everything is recorded in Fund Manager in pre-tax figures, so this would be consistent with that.

Thanks,
Mark
--
Mark Beiley
Fund Manager, portfolio management software for Windows 95/98/ME/NT/00/XP/2003

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