Re: Capital Gain Distribution

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Posted by Mark on April 12, 2007 at 16:56:49:

In Reply to: Re: Capital Gain Distribution posted by Sean Phillips on April 12, 2007 at 16:45:19:

: : This sounds like a reinvested distribution of type "capital gain". When you have a reinvested distribution, your cost basis goes up by the amount of the reinvestment. Did you actually receive this money in cash, or did you end up with more shares?

:
: Neither. The only change is an adjustment of the cost basis.

Hi Sean,

So, to make sure I understand...

- You received no cash.

- You are required to pay taxes on this distribution you didn't receive in cash.

- Your cost basis in your remaining shares has increased by the amount of this distribution.

- You own the same number of shares now as before.

If all of the above is correct, I would suggest recording it with the combination of 2 transactions:

1) A reinvested distribution of type 'capital gain'. You can pick a number of shares that works with the closing price on the transaction date and the distribution amount.

2) Record a split. Assuming you owned X shares before, and you used Y shares for the reinvested distribution, you currently own X + Y shares, but you really end up with X shares again. The split ration would be "X" for "X + Y" shares.

Thanks,
Mark
--
Fund Manager - Portfolio Management Software

Replies:

• Re: Capital Gain Distribution Sean Phillips 10:01:02 04/13/07 (0)