GnuGord You could use an Income sub-account, after all they are temporary equity accounts anyway, but it is likely not the best way of doing it as your asset may exist gaining (or losing) value over a number of years if you are not a speculative investor but taxation only applies (CGT or income) in the year of sale.
Recording it under Income then results in it being recorded as income distributed over over a number of years when you really only receive ist value as actual income when you sell the asset. When you finally do sell it you are likely to have to pay tax (Income or CGT depending on the circumstances and jurisdictional legislation) on the amount you receive in the year you sell it but you have recorded its losses and gains over a number of years- to which of these years do you apply corrections. If you put all the correction to the unrealized gain in the current year, it is likely you will not report correctly for tax purposes in that tax year and if it is appreciable and the tax man gets wind of it, it may open you up to penalties for misreporting. By recording it directly in equity, rather than income you achieve the purpose of recording the ongoing changes to your net worth, you are less likely to misreport for any taxation purpose and you can correct it at the time of sale with a single entry to zero out the unrealized gains/losses and record the actual gains and losses in the current year. Both can be made to work, but recording in unrealized gains/losses in equity rather than in income is likely to be simpler longer term. Realized gains/losses are of course always recorded under income. Dividends are taxed as normal income and usually the proceeds of sale for stocks as capital gains or losses but this can be jurisdictional dependent. Ultimately as long as it is recorded in a reasonable manner with sufficient detail, your accountant can sort it out if necessary, but of course he/she will charge you for doing so. For the record I have a masters in accounting, (but I am not a practising accountant) and I live in Australia. David Cousens. ----- David Cousens -- Sent from: http://gnucash.1415818.n4.nabble.com/GnuCash-User-f1415819.html _______________________________________________ gnucash-user mailing list [email protected] To update your subscription preferences or to unsubscribe: https://lists.gnucash.org/mailman/listinfo/gnucash-user If you are using Nabble or Gmane, please see https://wiki.gnucash.org/wiki/Mailing_Lists for more information. ----- Please remember to CC this list on all your replies. You can do this by using Reply-To-List or Reply-All.
