"No I mean that when you close a position, brokers don't report which lots were closed, so it's up to you to choose how much basis to reduce, and the typical thing to do is to remove at the average of the entire position's cost basis."
i see, so basically if i had 100 MSFT shares purchased at $100, and 100 MSFT shares purchased at $200, then sold 50 shares at $400, i won't know (cause it's not reported) shares of which lot were sold, right? So i would have to use average cost basis (in this case $150). On Thursday, November 11, 2021 at 10:16:22 PM UTC-5 [email protected] wrote: > On Thu, Nov 11, 2021 at 7:06 PM Bman Q <[email protected]> wrote: > >> guys hi, thank you for all replies! >> >> i got everything except the "cost issue" part: >> >> "cost basis in an IRA is usually AVERAGE cost basis. Vanguard for >> example uses average basis exclusively in IRAs last I checked." >> >> AND >> >> "One problem is that brokers don't need to report cost basis for those >> accounts, so they tend to provide much less support for tracking that, and >> so you end up using average cost basis tracking on closing transactions." >> >> Do you mean brokers don't report price at which position in this or that >> instrument was opened? >> > > No I mean that when you close a position, brokers don't report which lots > were closed, so it's up to you to choose how much basis to reduce, and the > typical thing to do is to remove at the average of the entire position's > cost basis. > > > >> If yes, shouldn't i have no this issue cause i (as solo 401k) am plan >> administrator and will be opening / closing positions >> and thus know the price i purchased stock at? >> > > You can account for it any way you please. You can use STRICT booking if > you like. > > > >> >> Or am i missing something? >> On Thursday, October 28, 2021 at 8:41:04 PM UTC-4 [email protected] wrote: >> >>> On Thu, Oct 28, 2021 at 6:45 PM Bman Q <[email protected]> wrote: >>> >>>> Hello everyone, >>>> >>>> As always i want to thank Martin and all community for beancount, >>>> i am so glad that 3.5 years ago i've chosen beancount over other free >>>> (gnucash, etc) or paid (quickbooks, etc) alternatives. Extendability and >>>> flexibility of beancount are unmatched. >>>> >>> >>> Thank you BmanQ! I'm glad this accounting library is able to help you. >>> >>> >>> >>>> And as always i have couple questions :) Please help :) >>>> >>>> 1. I have single member llc (sole proprietor), when i make solo 401k >>>> contribution (salary deferral and profit sharing parts) effectively i >>>> simply transferring funds from my one account (business) to my another >>>> account (tax deferred), >>>> so do i simply have following journal entry >>>> >>>> 2020-05-15 * "solo 401k contribution" >>>> Assets:BusinessChecking - >>>> 24500 USD >>>> Assets:PreTax401k:CSchwab:Cash 24500 USD >>>> >>>> ? >>>> >>> >>>> (i have 2 sets of books, and for LLC "tax" books i do following journal >>>> entry >>>> to make it easy for me do taxes: >>>> >>> >>>> 2020-05-15 * "solo 401k contribution" >>>> Equity:401kProfitSharing >>>> 5000 USD >>>> Equity:401kSalaryDeferral >>>> 19500 USD >>>> Assets:BusinessChecking - >>>> 24500 USD >>>> here i am trying to understand what i should track for myself to make >>>> records useful) >>>> >>> >>> I'm not sure. What does the IRS require you to declare? I think that's >>> the answer. >>> Now if I were you, in the personal account I wouldn't casll this >>> "Assets:BusinessChecking" but instead would categorize it as >>> Income:Business:401kContribution or somesuch. >>> >>> On the business side, that's an expense, no? So I'd replace the Equity >>> accounts by expense accounts. >>> (In general, you should have very, very little explicit transactions to >>> an Equity account and they should look like exceptional transactions that >>> occur rarely and for adjustments.) >>> >>> >>> >>>> 2. Do i understand it right that >>>> - i also should create separate 401k income account >>>> Income:PreTax401k:CSchwab:Gains >>>> (separate from my regular brokerage account Income:CSchwab:Gains) >>>> >>> -and that all gains / losses from this account will be ignored tax wise >>>> for now >>>> (won't be included on my 1040 until i take money from it when i am old >>>> person) >>>> >>> >>> Yes, and yes, but personally I still account for these using cost basis >>> so that I can calculate P/L. >>> One problem is that brokers don't need to report cost basis for those >>> accounts, so they tend to provide much less support for tracking that, and >>> so you end up using average cost basis tracking on closing transactions. >>> >>> >>> 3. When checking Martin's example file i saw he uses "IRAUSD" currency >>>> for 401k, >>>> could someone explain why? What's the idea behind it? (comparing to >>>> using USD) >>>> >>> >>> This is a fictional currency used to track "Dollars eligible to >>> contribute to the IRA." >>> You have a maximum; at the beginning of each calendar year you reset it. >>> Track it in parallel with the contributions (mirroring them). >>> Allows you to track how many remaining contributions you are eligible to >>> make. >>> You don't really have to use it nor its mirroring, it's just a >>> convenience. >>> >>> >>> >>>> >>>> 4. Any other tips / advises you can give regarding 401k books ? >>>> >>> >>> Maximize your 401k. Maximize your Roth. Even if the investment >>> choices are subpar in there. >>> The absence of taxes makes those returns hard to beat at least compared >>> to regular passive investing returns. >>> >>> >>> >>> Thank you >>>> >>>> -- >>>> You received this message because you are subscribed to the Google >>>> Groups "Beancount" group. >>>> To unsubscribe from this group and stop receiving emails from it, send >>>> an email to [email protected]. >>>> >>> To view this discussion on the web visit >>>> https://groups.google.com/d/msgid/beancount/7a210e41-4f33-41dc-b5b5-0280567153b4n%40googlegroups.com >>>> >>>> <https://groups.google.com/d/msgid/beancount/7a210e41-4f33-41dc-b5b5-0280567153b4n%40googlegroups.com?utm_medium=email&utm_source=footer> >>>> . >>>> >>> -- >> You received this message because you are subscribed to the Google Groups >> "Beancount" group. >> To unsubscribe from this group and stop receiving emails from it, send an >> email to [email protected]. >> > To view this discussion on the web visit >> https://groups.google.com/d/msgid/beancount/3ca9377b-40b6-476b-87ca-182931e4c138n%40googlegroups.com >> >> <https://groups.google.com/d/msgid/beancount/3ca9377b-40b6-476b-87ca-182931e4c138n%40googlegroups.com?utm_medium=email&utm_source=footer> >> . >> > -- You received this message because you are subscribed to the Google Groups "Beancount" group. To unsubscribe from this group and stop receiving emails from it, send an email to [email protected]. To view this discussion on the web visit https://groups.google.com/d/msgid/beancount/72362665-e028-4205-8770-a668143903b9n%40googlegroups.com.
