Hi Michael
I assume that you want to retain the original lot so that you know the
acquisition date associated with it when you ultimately dispose of it
and realise a capital gain/loss? Unfortunately I do not believe that
the Lots functionality in GnuCash is sophisticated enough to do that.
As a workaround you could record the original dates in the Notes field
of the new Lots.
>Why does that not create a capital gains transaction?
In my example the lots are closed at their original acquisition cost, so
there is no capital gain brought to book. The existing *unrealised*
capital gain carries forward into the new Parent and Child Lots.
> https://lists.gnucash.org/pipermail/gnucash-user/2012-March/044159.html
That example from 2012 is more complex than my example as it involves
cash and a capital gain, but the Lot treatment would be essentially the
same as mine. I would, however, use "Income:CapitalGain" instead of
"Assets:CapitalGain".
No two spin-offs are the same, and you need to look at the tax treatment
by the relevant regulatory authority before you can decide how to enter
it into GnuCash.
Regards
Geoff
=====
On 30/09/2024 12:20 pm, Michael Matz wrote:
Geoff,
Thanks for detailed example. It looks similar to a suggestion made in
2012 that I had dismissed because it closes out the original lot, which
I am hoping to avoid. Why does that not create a capital gains transaction?
https://lists.gnucash.org/pipermail/gnucash-user/2012-March/044159.html
I will look into this more tomorrow, when I have GnuCash in front of me
again. This may be my best option but it feels like a feature is missing.
Thanks also for the mention of this investment lot report. I've read
about it but haven't tried it yet. That may be a good reason to upgrade.
Michael
On Sun, Sep 29, 2024, 9:50 PM Geoff <cleanoutmys...@gmail.com
<mailto:cleanoutmys...@gmail.com>> wrote:
Hi Michael
Assuming that this spin-off has not crystallised a capital gains event
for you, and the reduction in the parent cost base becomes the child
cost base, you can do this with a single nett zero-value transaction
which:
(1) Closes out your original parent lots at original acquisition cost
(2) Creates new parent lots at new reduced cost
(3) Creates a new child lot at inherited cost which is the difference
Then simply scrub out your lots in the Lot Editor.
To illustrate this, I have created a simple scenario where you have two
parent lots and the split is done on an 80% parent, 20% child basis.
For simplicity I have assumed that the strike price for the split is
$100, and the new post-split stock prices are $80 and $20.
There are two attachments. The first shows how to account for this
scenario in a spreadsheet, and the second shows how to execute it in
GnuCash. The original (unrealised) capital gain is preserved but now
split over both of the stocks.
Note that the new Investment Lots report may not be available to you if
you are running an older version of GnuCash. This example was done on
Windows 10 using GnuCash v5.8 Build ID: git
5.8-117-g6aeca0040e+(2024-09-26)
Hope this helps.
Regards
Geoff
=====
On 30/09/2024 7:52 am, Michael Matz wrote:
> I've been using GnuCash for my personal finances for many years.
I've
> not used the stock lot feature until recently and am working
thought my
> old data and adding stock lots and capital gains transactions.
>
> How do I add a transaction to a lot, which changes the cost basis
but
> not the number of shares?
>
> In the user guide, I found a section about return of capital,
which says
> to enter a transaction in the stock account with 0 shares.
However, that
> transaction is not in the "Splits free" list in the lot editor so I
> can't add it to the lot.
>
>
https://www.gnucash.org/docs/v5/C/gnucash-guide/invest-retofcap.html
<https://www.gnucash.org/docs/v5/C/gnucash-guide/invest-retofcap.html>
>
> My need is slightly different, a spin-off rather than return to
capital,
> but it is essentially the same in that it changes the cost basis
but not
> the number of shares. I found this post which gets me most of the
way
> there:
>
>
https://lists.gnucash.org/pipermail/gnucash-user/2018-February/074963.html
<https://lists.gnucash.org/pipermail/gnucash-user/2018-February/074963.html>
>
> Following this, I can create a lot and the correct capital gains
> transaction for the spin-off stock. However, the same issue
exists with
> the 0 share transaction for the parent company - it can't be
added to a
> lot so the cost basis for the parent stock is wrong.
>
> Am I missing something or is there no way to add a transaction to
a lot
> which changes the cost-basis but not the number of shares?
>
> Thanks,
>
> Michael
>
> GnuCash 5.4, Ubuntu
>
>
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