On Sun, Sep 2, 2018 at 11:23 AM Bill Harris <[email protected]> wrote:
> Thanks, Martin, for the comprehensive response! I'll catch a few
> highlights right now.
>
> I think my original showed a stock split in which I destroyed the original
> shares and added new ones with the same date, something like
>
> 2001-06-01 * "stock split"
> Assets:BrokerA:AA -20 AA {40.00 USD, 2001-01-05}
> Assets:BrokerA:AA -18 AA {50.00 USD, 2001-04-05}
> Assets:BrokerA:AA 40 AA {20.00 USD, 2001-01-05}
> Assets:BrokerA:AA 36 AA {25.00 USD, 2001-04-05}
>
> I sense this maintains the issue date of the original shares on the new 40
> AA and 36 AA while keeping them as distinct lots. That seems useful to me
> if they are certificates, for the 40 sh. could be a different piece of
> paper from the 36 sh. It could be important if you direct the sale of
> specific lots: "Sell 20 sh. AA acquired at 20 USD"). (As I understand it,
> once you start selling by lot, then it's hard to sell by average cost.
> It's even harder to change what you did years ago.)
>
> To make that a bit easier, I added labels to the certificates.something
> like this:
>
> 2001-06-01 * "stock split"
> Assets:Cert:AA -20 AA {40.00 USD, 2001-01-05, "C1"}
> Assets:Cert:AA -18 AA {50.00 USD, 2001-04-05, "C2"}
> Assets:Cert:AA 40 AA {20.00 USD, 2001-01-05, "C3"}
> Assets:Cert:AA 36 AA {25.00 USD, 2001-04-05, "C4"}
>
> Except that's not how it works, right? Typically they'd just send out the
> new, incremental shares:
>
> 2001-06-01 * "stock split"
> Assets:Cert:AA -20 AA {40.00 USD, 2001-01-05, "C1"}
> Assets:Cert:AA -18 AA {50.00 USD, 2001-04-05, "C2"}
> Assets:Cert:AA 20 AA {20.00 USD, 2001-01-05, "C1"}
> Assets:Cert:AA 18 AA {25.00 USD, 2001-04-05, "C1"}
> Assets:Cert:AA 20 AA {20.00 USD, 2001-01-05, "C3"}
> Assets:Cert:AA 18 AA {25.00 USD, 2001-04-05, "C4"}
>
> That updates the basis on C1 and C2 and adds the new C3 and C4. Now each
> labelled stock has the right date and basis.
>
> But that's not how it works, either, right? Typically they'd just send
> out one certificate for 38 sh.:
>
> 2001-06-01 * "stock split"
> Assets:Cert:AA -20 AA {40.00 USD, 2001-01-05, "C1"}
> Assets:Cert:AA -18 AA {50.00 USD, 2001-04-05, "C2"}
> Assets:Cert:AA 20 AA {20.00 USD, 2001-01-05, "C1"}
> Assets:Cert:AA 18 AA {25.00 USD, 2001-04-05, "C1"}
> Assets:Cert:AA 38 AA {22.37 USD, 2001-01-05, "C3"}
>
> Now C3 has a basis that's 22.3684210526 USD (or 22.37 USD -- the weighted
> average of the new 20 and 18 AA).
>
> Is that the way you'd track it? (I realize that's both a tax and a
> Beancount accounting question.) I think both the IRS and Beancount would
> be happy, at least if I never sell, oh, 25 sh. of C3 and keep the remaining
> 13 AA out of that lot. Even if I did, in a practical sense, that
> *probably* leads to a *de minimus" *error, I'm hoping.
>
I think it's up to you how to track it. Using unique labels will (a) allow
you to easily specify lots when you sell, i.e., you just use the label, as
in {"C2"} on a reducing posting, and (b) ensure that the lots with distinct
labels won't get merged (even if they have the same cost and acquisition
date). The thing that matters is that you keep the cost basis correctly.
Personally I like your first method best (with no labels).
If those lots were at a broker, then I'd now have 76 sh. AA there. I would
> do myself a service by identifying the lot to sell as being from one or
> more of C1, C2, and/or C3, and I would make my life a bit easier (in an
> audit, at least) if I sold C3 all at one time. Make sense?
>
I always identify specific lots when I sell (if I'm allowed to).
>
> I don't think I've ever done that with a certificate, but, once it's
> lumped at a broker, it might be easy to do inadvertently.
>
> On Fri, Aug 31, 2018 at 7:40 PM Martin Blais <[email protected]> wrote:
>
>>
>>> I hope this helps,
>>
>
> Quite a bit; thanks!
>
> Bill
> --
> Bill Harris
>
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