I have been trying to figure out how to use Gnucash to track
realized gains calculations on stock trades, but I don't quite
understand it. Can someone give me a few hints on this? I've
tried reading all of the documentation, but I'm still missing
something.
Here's what I understand so far:
- An account is set up for the brokerage account.
- A sub-account is set up for the stock.
- Transfer money for shares from the brokerage account to the stock
account. The stock will have a price associated with it in this
transfer. Assume a purchase of one share at $30.
- Change the price of the share from $30 to $50.
- Transfer money from the stock account back to the brokerage
account when the stock is sold. Assume one share at $50.
Now I'm a little confused on how the $20 profit should be recorded
as income. Of course the stock account starts with zero shares and
ends with zero in shares this case, but a different number of dollars
is transferred into and out of the stock account. It seems like $20
should flow into the brokerage account from somewhere else to make
everything balance. Should this handled with a transfer in from
"realized gain" account? If it is correct, how is that handled?
My guesses are:
- Changing the price of a stock requires a transfer of money from
another account. This doesn't seem right because it doesn't
differentiate between realized gain and unrealized gain.
- Selling a stock is recorded as a split. $50 is transferred into
the brokerage account, $30 is transferred from the stock account,
and $20 is transferred from the realized gain account. This doesn't
sound right because it doesn't take into account the price changes.
- A combination of the two is used. Changing a stock price draws
$20 from an "unrealized gain" account. Selling a stock transfers
$20 from the "unrealized gain" account into a "realized gain"
account. Is this close?
- Another option is that I'm completely wrong on all of this and I
haven't got a clue how it's handled.
If Gnucash can handle this, then I am interested in learning how to
use it. If Gnucash does not yet handle this information, then I am
interested in helping to implement it. Quicken handles this, except
it's all done as magic to the user. There doesn't seem to be a way
to choose where quicken gets this profit from. With Quicken, all
profit comes from a single account. It is difficult to separate
profit into different accounts for things like tracking taxable
income and non-taxable income.
Any thoughts?
Thanks.
Gerald
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