Hi, David! I can't tell you what GnuCash does in your scenario, because I wasn't able to get GC to handle my ETFs from Vanguard. That wasn't a big deal before I adopted GC in 2017, I already had a spreadsheet for each Vanguard account (taxable and IRA), with a column for each fund within that account. So GC tracks the total value of each Vanguard account, but not the values of the funds within those accounts.
I do something similar to you to track unrealized gains and losses (debit the account for that Vanguard account, and credit Unrealized Gains/Losses), and I too credit Realized Gains/Losses and debit Unrealized Gains/Losses when I actually sell. (You said it the other way; was that a thinko, or do you actually debit the Realized Gain account? That would seem wrong to me.) I also figure the change in my estimated tax from the realized capital gains and post a debit to Expenses:Income Tax and a credit to Liabilities:Taxes Payable. But I'm puzzled why you think there should be any tax treatment at all of UNrealized gains or losses. Stocks and ETFs don't always go up, and those unrealized gains could be wiped out in part or in full, maybe even more than wiped out, as happened to many of us in 2022. If, as I infer, this is your own books for your own purposes, then of course you're free to do whatever seems best to you. But to me, recording "deferred taxes" for unrealized gains, which are not taxable, seems inappropriate. When I worked for Ernst & Ernst and they put me through a basic accounting course, if I recall correctly, they taught me that Deferred Taxes was basically for timing differences. For instance, you might depreciate an asset on your books using one method and on your taxes using a more favorable method; the difference in that year would go into Deferred Taxes. But the fact that depreciation occurs was a real taxable event, not some airy-fairy speculation about whether an asset might depreciate or not depreciate. I don't think we were ever given an example of an entry to Deferred Taxes for something that _might_ become a taxable event at some future time. Stan Brown Tehachapi, CA, USA https://BrownMath.com On 2024-07-23 14:57, David Warren wrote: > I have been using gnucash for almost a year and have a fairly sophisticated > set of personal accounts, with lots of investment (asset) accounts. > > Basically, I have settled on two types of investment (asset) accounts: > > 1. Ones where I want to adjust values regularly via adjusting the price > of an underlying security, and hence I create these investment asset > accounts as Type Stock in gnucash, and then associate each of these Stock > accounts with a created security, and > 2. Other investment accounts where I manually adjust the valuation, > either by debiting/crediting actual cash received into or distributed from > the investment account, or I make manual entries for unrealized gains, > where I debit the asset account itself (for a gain) and credit an > Income:Unrealized Gain:Account Name for the unrealized entry. Later, when > I experience realized capital gains for such accounts, I credit the > Income:Unrealized Gain account and debit an Income:Realized Gain:Account > Name account, which then helps me set up for tax time. I realize that the > gnucash documentation suggests creating asset sub-accounts for Cost vs. > Unrealized Gain, but (so far), it works for me to use the individual asset > account to handle both initial cost and subsequent gains/losses of various > types. > > > I have two initial questions about the above set up: > > 1. When I use Asset accounts of type Stock, and when I update prices in > the Price Database, and see the "Current Value" of these asset accounts > generally grow, is gnucash creating debit/credit entries somewhere to > reflect these changes in value? or no, I can see a "current value" that > exceeds cost basis, and I can set certain asset reports to see updated > current values, but there actually are no accessible debit/credit shadow > entries that I can somehow access / see / visualize / use? > 2. In either scenario, when I update valuations (say once every 3 months > or so), in addition to seeing new asset values in the asset accounts, I > would like to track Deferred Capital Gains Taxes liability account(s), > reflecting the amounts I would owe the government in taxes were I to sell > investments and monetize capital gains. I am curious how other people with > sophisticated investment accounts track deferred capital gains taxes in > gnucash. First, do you create an individual Liability:Deferred Taxes > Unrealized Gains account (as I have so far), and then use the Description > or other fields to indicate which investments resulted in > increasing/decreasing this liability account? Do you blow up your account > structure by creating Liability:Deferred Taxes:Investment 1, 2, 3, etc. > accounts for each and every investment account? When I increase the value > of an investment asset account, I generally also credit this Deferred Taxes > liability account and debit an Expenses:Taxes:Deferred account. But I've > generally manually entered these unrealized gains entries as separate > individual entries at quarter end, whereas I think it might make it easier > for me to audit/track if when I debit the asset account (for unrealized > gains), I go ahead and credit the income:unrealized Gain account, but in > that same 'split' entry, also credit the deferred tax liability account and > debit the Expenses:Taxes:Deferred account. Do others do these 4-handed > entries in this manner? If so, then if no entries are actually created > for the asset accounts of type Stock, I would just continue to create > manually the Deferred Tax expense debits and liability account credits as I > have been doing. I realize I have an inconsistency in that I currently > create/track *individual *Income: accounts for Unrealized Gains for each > investment account, but on the deferred tax Liability side (as well as for > Expenses:Taxes:Deferred tracking) I am lumping the transactions together > into single catch-all Tax Liability and Tax Expense accounts. I'm curious > how others who have cycled through many tax years handle this. > > Everything should have a *reason *for tracking. My reason is that if there > are gains in certain of my investment accounts, I don't want my net worth > to appear higher than it actually is, and I want to be prepared for large > tax bills (high class problem) where I will need cash to pay the government > when investment gains are ultimately realized. > > Thanks in advance for any tips or realized practices... > > David > _______________________________________________ > gnucash-user mailing list > gnucash-user@gnucash.org > To update your subscription preferences or to unsubscribe: > https://lists.gnucash.org/mailman/listinfo/gnucash-user > ----- > 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 ----- Please remember to CC this list on all your replies. 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