I said: > ........ I am not an expert about how personal financial accounting should be done, where that is different from business accounting....... Another said: "If you lack the "qualifications" to be a tax advisor, don't say tings like that" My response: Well, I don't think i did wrong by suggesting there could be tax consequences of how the educational fund was set up, and by my pointing to 529 plans in the U.S., not yet brought up. I will try to be clear about what I know and don't know, and think I did okay that way in the qualifications I stated.
Right, though, I surmised, possibly incorrectly, that for the original poster, that unrealized gains/losses in an informal fund should be included in regular income and would be taxable. It has been pointed out that the gains/losses might not be taxable until stocks are sold. Their question, anyhow, was how to do the accounting in GnuCash, and that is still open IMO. --Don P.S. Feel free to skip from here on, in which I muse about use of Other Comprehensive Income reporting, that seems relevant to me for this application. For a business with stock investments, the taxability and reporting of unrealized gains/losses of stocks depends on how they are classified. https://www.ais-cpa.com/sample/ is one source summarizing. If classified as "Trading Securities", then unrealized gains/losses are to be included in current period regular income. I would think that the accounting for this would be straightforward in GnuCash, but I'd like to see what it looks like exactly. Anyhow a separate spreadsheet might be used to track the component stocks in a special fund treated as Trading Securities, and GnuCash journal entries might be: February 15: Purchase 15 shares at $10/share and add to Special Fund Special Fund $150 Checking account $150 December 31: Recognize unrealized gain from shares now being worth $17: Special Fund $20 Gains/Losses from Special Fund $20 and the Gains/Losses from Special Fund would be a regular Income account. If classified as "Available for Sale Securities", then unrealized gains/losses are NOT included in regular income, but rather are reported in what is called "other comprehensive income", which appears in a Comprehensive Income Statement, a different statement than (or it could be considered to be a continuation of) the regular Income Statement report. Which GnuCash and most or all versions of Quickbooks AFAIK do not currently directly support. To support it, "Other Comprehensive Income" would need to be a defined type of account. In GnuCash, the only income and expense types of accounts are just "Income" and "Expense". In a version of QuickBooks, there are "Income", "Other Income", "Expense", "Cost of Goods Sold", and "Other Expense". The "Other Income" would appear near the bottom of an Income Statement but would be included in the bottomline Income. "Other Income" ("Other Expense") are for "Money received (spent) for something other than normal business operations, such as interest income (corporate taxes)" and these are not OCI accounts. I suppose the absence of explicit OCI account type might be worked around, by using "OCI" in the account names where relevant, and similiarly defining the corresponding shareholder equity account(s), but i am not completely sure, and it would nice if GnuCash just allowed for these explicitly. February 15: Purchase 15 shares at $10/share and add to Special Fund Special Fund $150 Checking account $150 December 31: Recognize unrealized gain from shares now being worth $17, into OCI: Special Fund $20 OCI Unrealized Gain/Loss in Special Fund $20 The " OCI Unrealized Gain/Loss in Special Fund" would not appear in regular Income, but would show in a Comprehensive Income statement. For another example of where OCI reporting would help, the BotanyBayGarden nonprofit has a need for it. It wants to have a regular income statement that includes donation and other revenues and its various operational expenses, but which excludes donations to an informal endowment and excludes gains/losses there. Those donations and gains/losses should appear as OCI items in a Comprehensive Income Statement. For an individual's financial statements done properly, are there not corresponding complications, where some stock investments are treated like Available For Sale Securities and others are treated like Trading Securities? It would seem to me that showing not-yet-taxed unrealized gains/losses explicitly, like for the business example above, would be helpful in the individual's reporting. I dunno, is there coverage of this in GnuCash's web documentation or elsewhere? --Don On Mon, Aug 3, 2020 at 10:39 PM dann frazier <da...@dannf.org> wrote: > On Sun, Aug 2, 2020 at 11:36 AM John Ralls <jra...@ceridwen.us> wrote: > > > > > > > > > On Aug 1, 2020, at 4:21 PM, dann frazier <da...@dannf.org> wrote: > > > > > > Hi, > > > > > > I'm trying to figure out the right way to represent a non-currency > > > debt in gnucash. That is, I'd like to be able to record that I *owe* > > > 20 shares of FooFund. I thought I'd just create a Mutual Fund > > > Liability account, but apparently Mutual Funds and Liabilities are > > > mutually exclusive. Is that restriction by design? > > > > > > One of the reasons I want to do this is for a college fund. I'd like > > > to keep track of the fund value in an account, but also "keep it off > > > the books" in a sense when it comes to Asset vs. Liability > > > calculations, as I consider it both something I have and something I > > > owe. I tried doing this by creating an Asset account and a Liability > > > account that grow together, and cancel each other out, but I couldn't > > > get that to work since it won't let me make the Liability a security. > > > Is there a better way to do this? > > > > Yes, only Asset accounts of type Stock and Fund can have non-currency > commodities. GnuCash doesn't support barter. > > > > You could do that with two Asset accounts, one with a positive balance > and the other with an equal negative balance. > > I think I tried that before but ran into another issue, but I don't > recall what it was. Let me give it another shot. > > > However, if what you're modeling is your kid's college fund it would be > more correct to create a separate book for it, particularly if it's a > tax-advantaged fund like a US 529 fund or a court-supervised entity like a > trust or guardianship. > > Yeah - you're probably right - but I assume I'd then have to deal with > contributions separately in both books, which would be a bit > cumbersome. > > -dann > _______________________________________________ > gnucash-user mailing list > gnucash-user@gnucash.org > To update your subscription preferences or to unsubscribe: > https://lists.gnucash.org/mailman/listinfo/gnucash-user > If you are using Nabble or Gmane, please see > https://wiki.gnucash.org/wiki/Mailing_Lists for more information. > ----- > Please remember to CC this list on all your replies. > You can do this by using Reply-To-List or Reply-All. > _______________________________________________ gnucash-user mailing list gnucash-user@gnucash.org To update your subscription preferences or to unsubscribe: https://lists.gnucash.org/mailman/listinfo/gnucash-user If you are using Nabble or Gmane, please see https://wiki.gnucash.org/wiki/Mailing_Lists for more information. ----- Please remember to CC this list on all your replies. 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