AFIK that issue with RoC is an artifact of US tax law, not GnuCash. Can't do much about it.
On Mon, Mar 31, 2025 at 3:12 PM R Losey <rlo...@gmail.com> wrote: > It IS a bit annoying - during the year, the dividends that mutual funds pay > are merely listed as "dividends"; I have to wait for the yearly 1099-DIV to > find out how much of the "dividend" is actually RoC or "Nondividend > Distributions" > > > > On Mon, Mar 31, 2025 at 11:37 AM Kalpesh Patel <kalpesh.pa...@usa.net> > wrote: > > > You are correct that they need to issue a 1099 by mid-February which is > > caveated that it is preliminary one, and final one coming later when they > > have handle on RoC. > > > > Unless I am mistaken here, on 1099-DIV they provide RoC on line 3) > > Nondividend Distributions. Even if the distribution of RoC is more > > frequent than yearly, it would be denoted in the accompanying statement > > as such. I guess it ultimately dependent on servicer, and their process > how > > they handle it. I normally see RoC play out in REIT mutual funds more > > often than not, but I also see it in investments available to accredited > > investors. > > > > -----Original Message----- > > From: John Ralls <jra...@ceridwen.us> > > Sent: Sunday, March 30, 2025 7:46 PM > > To: stepbystepf...@comcast.net > > Cc: gnucash-user@gnucash.org > > Subject: Re: [GNC] Return of capital, lots & accurate gains > > > > > > > > > On Mar 30, 2025, at 12:32 PM, Michael or Penny Novack via gnucash-user > < > > gnucash-user@gnucash.org> wrote: > > > > > > On 3/30/2025 3:16 PM, Kalpesh Patel wrote: > > >> > > >> I was under the understanding that the effect of return of capital > > (RoC) is that the capital gains get postponed until when you sell the > > commodity, and that the cost basis gets reduced by it when RoC is > > distributed. > > >> > > >> In the States, the financial servicer should not be sending a dividend > > statement, and re-characterize it as a RoC at another time - they are two > > different things and are treated differently for the tax purposes. > > >> > > >> I normally go back to the original purchase transaction and readjust > > the cost basis for them. It does become a bit cumber some if multiple > lots > > are involved but I believe that is the correct treatment of it. I welcome > > weigh in from pro's than I am. > > > > > > Correct ---- You debit cash (for the check received) and credit the > > basis. LATER (when eventually sold) will affect capital gains since you > > subtract the (remaining) basis from the sale price. > > > > > > However -- terminology can be historic, so a return of capital > > distribution is still called a "dividend". Perhaps because at the > corporate > > level the same rules apply? << becomes a liability when declared by the > > BOD, that is almost certainly well before the date when to be paid out.>> > > > > The following is a totally USA perspective. I have no idea if other > > countries even allow returns of capital: > > > > I think it depends on the type of security. If the investment sends you a > > K-1 then it can do returns of capital. If it sends (or causes your broker > > to send) a 1099 then it pays a dividend or interest. > > > > A return of capital isn’t a capital gain, it’s a reduction in basis, at > > least in theory and only until they’ve given you back all of your > > investment. Once that happens then it turns into ordinary income. > > > > But things get messy when you invest in a mutual fund that in turn > invests > > in private equity or master limited partnerships. K-1s aren’t due until > the > > end of February (and I’ve gotten them as late as mid-March). Until the > fund > > gets the K-1s and runs the numbers it doesn’t know how much of what it > paid > > to its customers in the last year was RoC… but it had to issue the 1099s > by > > mid-February so they have to issue revised ones after they’ve punched in > > the K-1 numbers. > > > > 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. > > > > > -- > _________________________________ > Richard Losey > rlo...@gmail.com > Micah 6:8 > _______________________________________________ > 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. > -- David Carlson _______________________________________________ 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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