Hi again. I'm going to go ahead and cc the whole group. I wouldln't be so hard on yourself. What I try to do in these situations, as I am far from an accountant (!), is just sit with pen and paper (or on my computer with virtual pen and paper) and try to think of what two things (debits and credits) are being increased or reduced.
And I will often "break down" transactions into their consitutent parts, or even represent a single transaction as if it were two. So if one of my limited partnership investments sent me money back (say $40) as return of capital, I would generally record that as Debit Asset:Bank Account Cash $40 ..............Credit Asset:Limited Partnership Investment $40 Then if I used that cash to reinvest back in the partnership, my next transaction would be Debit Asset:Limited Partnership Investment $40 .................Credit Asset:Bank Account Cash $40 And you may notice that the net effect of those two transactions is..... nothing. So if nothing else happened, I might record both of these transactions for other reasons (if the PRICE of the units has changed, there could very well be future tax consequences here.) But then we'd have to get into how you are using gnucash generally. Are you using trading accounts? Are you recording individual stock purchases as shares and prices and modifying those prices regularly? etc. On Fri, Jun 6, 2025 at 5:34 PM bunk3m <[email protected]> wrote: > Thank you for the quick reply, David > > Yes, I'm a bit muddled on this. > > I bought an investment. They pay a distribution and use the > distribution to buy more units. It's a typical DRIP. > > Then at the end of the year, I'm told the partnership income was return > of capital. So I think the adjusted cost base of the investment is > reduced so when you sell it is a capital gain. > > Many moving parts and I'm confused. Apologies for the crappy example, I > was trying to logic out what was happening. I guess I failed. > > Thanks. > B. > > On 06.06.2025 17:02, David Warren wrote: > > Hi. I don't see how you are going to get an accurate gnucash > > representation before you have a strong view of what you think the > > actual real world financial representation is supposed to be. > > > > If I bought 50 units of a limited partnership for $10/share (total of > > $500), and then the partnership returned $40 of capital to me (i.e. > > $0.80/share x 50 units), everything else being equal I don't know why > > you would say "there are now xxx units @ $10/unit". Unless something > > else has occurred, an $0.80/share return of capital should result in > > units worth (and costing) $9.20/unit. So I don't know how you're > > getting to your statement that "there should be $540 in asset value of > > the LP units". > > > > If I owned $500 of something, and someone returned $40 of that capital > > to me, but then offered to sell me new units in lieu of sending me that > > $40 (or think of it as the partnership returned $40 and then you /bought > > /new units), I don't see any value being created solely in that process. > > > > Of course, if the units have /appreciated /in value in some way, you > > will need some mechanism to reflect that, and also to record or not > > record "income". > > > > We can tell you plenty of ways to record return-of-capital distributions > > in gnucash. > > We can tell you plenty of ways to record income in gnucash. > > But we don't have enough information from what you wrote to get you a > > perfect answer. > > > > On Fri, Jun 6, 2025 at 3:56 PM bunk3m <[email protected] > > <mailto:[email protected]>> wrote: > > > > I'm trying to figure out how to account for a quarterly distribution > > that I receive from an investment (call it "LP") that is converted > into > > new units. While that would be similar to a distribution > reinvestment > > (DRIP), the income is a return of capital not income. > > > > I can't figure out how this is supposed to be done in Gnucash. > While I > > found parts of this transaction in tutorial and guide, I'm still > > confused. > > > > So the way I understand things, this is what I should see in the > first > > quarter after 50 units of LP were purchased at $10/unit and total of > > $500. Return of capital $40 that is reinvested in 4 units. > > > > Initial purchase in first quarter: > > [Asset:Investments:PrivateEquity:LP] $500 > > being 50 units at $10/unit > > [Cash] -$500 > > > > Distribution amount $40 (Price still $10/unit) in second quarter. > > > > After distribution there should be $540 in asset value of the units > of > > LP since there are now 54 units @ $10/unit. But the cost base of the > > investment should be, I think, $500 ($500 initial investment - $40 > > return of capital + $40 return of capital reinvested in units). > > > > Is this conceptually what is supposed to happen? If so, how do I get > > Gnucash to show this? When I try to do the return of capital I end > up > > with the correct number of units but lower value and $40 income. > > > > Is a reference to help me understand this please let me know where to > > find it. > > > > Thanks. > > > > > > > > _______________________________________________ > > gnucash-user mailing list > > [email protected] <mailto:[email protected]> > > To update your subscription preferences or to unsubscribe: > > https://lists.gnucash.org/mailman/listinfo/gnucash-user > > <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. > > > _______________________________________________ gnucash-user mailing list [email protected] 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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