Re: Capital Gain

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Posted by Gary Trimmier on July 17, 2006 at 13:23:13:

In Reply to: Re: Capital Gain posted by Mark on July 17, 2006 at 10:29:53:

: : Mark,
: : Thanks. I did record the stock with a purchase price of $0. However when a run any of the capital gain reports after I sell the stock it shows a 100% gain. Now that is true for the value, however it is not true for tax reporting. The capital gain/loss should be the difference of the value when I or giver received the stock and when it was sold.
: : Thanks again,
: : Gary T.

: Hi Gary,

: The gain shown on the capital gains reports will be the value you sold it at minus your cost basis. If you bought it at a price of $0 then the gain will be 100% of the sell value. If there is another cost basis you'd like to use (because it transferred from the person who gave you the stock) then you should record your purchase at that price, instead of $0.

: Thanks,
: Mark
: --

Mark - again what you write is true, however if I accommodate IRS rules and record the cost basis from the person who gave me the stock, to provide a Capital Gain report, the stocks true value to me, as reported in performance reports is not accurate. I know I may be going in circles, but if I receive 100 shares as a gift ($0 Invested) and record it as such, then sell the shares at $10.00 I have a 100% gain of $1,000.00. Now this is its true performance and value to my portfolio. If I record the gift to satisfy the Capital Gain reports with a cost basis of its value from the person who gave me the stock, which is $10.00 per share. Then with a sell of the 100 shares, there is no gain and no increase in value to my portfolio.
Thanks,
Gary T.
: Fund Manager - Portfolio Management Software

Replies:

• Re: Capital Gain Mark 13:52:01 07/17/06 (0)