Dear John, Thank you for your reply.
I don’t understand what you mean by “zero this out for today”. Maybe I misunderstood what you meant when you said, If the net gains aren’t taxable then you can book them to a separate > non-taxable income account. Say I'm doing my US reporting, and this transfer from USD to JPY wouldn't be taxable (as far as I know, only the opposite would be). Then to "book them to a separate non-taxable income account" would involve what exactly? Say I had an Income:NonTaxable account, what would the transaction look like? I apparently can't offset a debit to Income:NonTaxable with either Trading account, so not sure what this would look like. Thanks again. On Fri, Feb 14, 2025 at 10:38 AM John Ralls <jra...@ceridwen.us> wrote: > Bo, > > I don’t understand what you mean by “zero this out for today”. > > The Totals column on the Accounts page presents the ending balance for > each account (even if that’s in the future), converted to the book currency > using the most recent exchange rate available from the account’s commodity > to the book currency. > > The manually created trading splits will look just like the automatically > created ones. The difference will be that you have to create them yourself, > selecting the taxable or non-taxable balance. Remember that the trading > accounts are outside of the accounting equation and exist to help you keep > track of your conversions into and out of commodities so that you book the > gains and losses and keep your overall book in balance. The goal of > splitting the trading accounts would be to make it clearer which trading > gains income account—taxable or not-taxable—needs to be adjusted to balance > your book. Mind that I’m not an accountant and even if I was I wouldn’t be > *your* accountant. I also have no experience as an ex-pat paying US taxes > on income earned in somebody else’s currency. > > One other thing to be aware of: The register displays currency differently > depending on whether trading accounts are enabled: When they’re enabled the > debit and credit numbers represent the amount in the split’s account’s > commodity; when trading accounts are off the credit and debit numbers are > the values in the current register’s account’s currency. In other words > with trading accounts off all of the amounts in your JapaneseChecking > register will be JPY and in Banking Service Fees they’ll all be USD. > > Regards, > John Ralls > > > On Feb 13, 2025, at 16:39, Bo Buckley <topherbuck...@gmail.com> wrote: > > Thank you for your reply John, > > >If the net gains aren’t taxable then you can book them to a separate > non-taxable income account. > > Even if I zero this out for today as an example, won't the Trading account > balance continue to fluctuate even after doing so as new price entries come > on day to day? I'm trying to understand how to finalize the transaction in > the same way I would wrap up a GOOG stock sale (i.e. I would never expect > to keep tracking unrealized gains/losses on the idea that the USD received > from the stock sale is waiting to be "sold" to return back to GOOG. > > >GnuCash also can’t automatically handle multiple trading accounts per > commodity. If you need that you’ll have to turn off trading accounts in > File>Properties and manage the trading accounts and splits manually. > > Assuming I turn it off, do you have an example transaction to help me > understand what you're proposing here? I'm not sure I understand what this > would solve. > > Thanks in advance. > > > > On Fri, Feb 14, 2025, 02:37 John Ralls <jra...@ceridwen.us> wrote: > >> >> >> > On Feb 13, 2025, at 01:19, Bo Buckley <topherbuck...@gmail.com> wrote: >> > >> > In the foreign currency docs: >> > https://gnucash.org/docs/v5/C/gnucash-guide/currency_trading_accts.html >> > >> > The Trading and CURRENCY placeholder accounts now indicate a modest >> >> realized loss of 0.82 USD on the currency transactions. >> > >> > >> > it appears to explain that the Trading top-most account balance >> represents >> > a loss if positive or a gain if negative. I only have a single >> transaction >> > so far that involves converting USD to JPY for a transfer. See attached >> for >> > the transaction. The Trading account already shows a balance of 247.38 >> USD. >> > How does this make sense? I didn't lose money on the transfer (other >> than >> > the fee). It appears this balance is calculated based on the most recent >> > Price Database entry for the currency (i.e. JPY at 0.0066 for >> 02/09/2025). : >> > 4,964.32 - (714,688* 0.0066) = 247.38. >> > >> > It seems to be interpreting a currency exchange from 1/9/2024 as a loss >> > even though at the time of the trade it was not a loss. How am I to >> > interpret this and what is this Trading Balance used for elsewhere? I >> don't >> > want it unintentionally affecting some other report calculations. >> > >> > For the sake of clarification, lets compare this behavior to stock >> trading. >> > USD and JPY are two commodities, just like USD and GOOG. For my example >> > transfer from USD to JPY, the Trading Account balance loss seems to be >> > similar to an unrealized loss if I interpret the transfer transaction as >> > buying JPY from USD with the intent to someday convert back to USD. >> This is >> > similar to buying GOOG from USD and if GOOG dropped in values since >> buying. >> > But why is it not interpreted the opposite way, i.e. I sold USD to get >> back >> > JPY (or I sold GOOG to get back JPY for the stock analogy)? I want to >> make >> > sure GNUcash is not unknowingly treating the correct transactions as >> > taxable events and not the opposite. I.e. for Japanese tax reporting the >> > transfer would represent a taxable event as I "sold USD". The opposite >> > would be true for US tax reporting no? I want to make sure I understand >> the >> > implications of this balance. >> >> Bo, >> >> The Accounts page Total column does use the most recent price database >> entry to value each commodity that isn’t the book currency and that will >> make the trading accounts reflect an unrealized gain or loss. >> >> US GAAP and IAS require all foreign currency transactions to be valued at >> the time of the transaction in the book currency, and doing so inevitably >> creates trading gains an losses that must be accounted for to keep the >> books in balance. If the net gains aren’t taxable then you can book them to >> a separate non-taxable income account. Keep in mind that GnuCash has no way >> of helping you catch mistakes where you book a capital gain or loss to the >> wrong income ro expense account: It can only verify that the accounting >> equation balances for the whole book. GnuCash also can’t automatically >> handle multiple trading accounts per commodity. If you need that you’ll >> have to turn off trading accounts in File>Properties and manage the trading >> accounts and splits manually. >> >> Regards, >> John Ralls > > > _______________________________________________ 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.
