Re: incorrect tax basis on a cash asset

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Posted by Chris on June 11, 2007 at 10:27:28:

In Reply to: Re: incorrect tax basis on a cash asset posted by Mark on June 08, 2007 at 23:26:49:

Mark - thank you. I changed the category of the fees to "other" and that fixed the problem. I assune that the change will not affect performance data? Maybe for future versions "cash" type assets could be exempted from the tax basis process.

On another note, in November 2006 Esteban Endere requested information on setting up a separate fee account. Could you elaborate on how that would work & how to set up?

Thanks again.

Chris

: Hi Chris,

: This is most likely due to the account fee. When you pay an account fee this increases your tax basis. By posting it at $1 as a negative reinvestment this is just saying that you sold shares at $1/share to pay for the fee. You still paid the account fee though, thus your tax cost basis is increased.

: Account fee and Return of Capital distribution types are unique, in that they affect your tax basis. Account fees paid increase your cost basis. Return of Capital received, lowers your tax cost basis.

: You can verify if it is all due to the account fee, or maybe some other transaction, by temporarily deleting the account fee.

: Thanks,
: Mark
: --
: Fund Manager - Portfolio Management Software

:
: : I think I located the problem but don't know how to fix it. When I increased the price digits to 6 it indicated a per share basis of 1.000027 which would account for the difference.

: : Thanks, again.

: : : 1) all transactions recorded @ $1
: : : 2) There are "account fee" transactions but they are posted at $1 as a negative reinvestment - no return of capital
: : : 3) no commission fees. Investment properties is coded as "no fees".

: : : Anything else I'm missing?

: : : thank you.

: : : : : on an asset type categorized as cash, what would cause the end shares balance to be different than the tax basis amount? I ran a custom report with these 2 fields and 3 of the 4 were correctly identical but the 4th had a $9.51 difference. Thank you.

: : : : Hi Chris,

: : : : Here are some places to look:

: : : : 1) Are all of your transactions recorded at $1/share?

: : : : 2) Do you have any "Account Fee" or "Return of Capital" distributions? These will affect your tax cost basis.

: : : : 3) Did you pay any commission fees on any of your purchases? These would cause your tax cost basis to be higher than your share balance.

: : : : Thanks,
: : : : Mark
: : : : --
: : : : Fund Manager - Portfolio Management Software

Replies:

• Re: incorrect tax basis on a cash asset Mark 13:20:40 06/11/07 (0)